SPRINGDALE, ARKANSAS, U.S. — Disappointing results in the beef and pork segments, rising costs and soft domestic demand led to a 61 percent decline in income at Tyson Foods, Inc. during the third quarter.
For the quarter ended June 30, the company had income of $76 million, equal to 21¢ per share, which compared with income of $196 million, or 53¢ per share during the third quarter last year. Tyson’s third-quarter earnings of 21¢ per share include a charge for the early extinguishment of debt totaling $167 million or 29¢ per diluted share and that excluding this early extinguishment charge, third quarter earnings per share was 50¢ versus 51¢ last year.
The company had sales of $8.308 billion during the quarter, up 1% from $8.247 billion during the same quarter of the previous year.
“We produced solid results in our fiscal third quarter despite softer-than-expected domestic demand for protein,” said Donnie Smith, president and chief executive officer of Tyson Foods. “I am especially pleased with the performance of our Chicken and Prepared Foods segments. Our Beef and Pork segments have been operating in very difficult market conditions that will result in our earnings for fiscal 2012 coming in lower than we previously projected.
“Grain costs have been increasing significantly and rapidly, largely as a result of the on-going U.S. drought. While we ultimately expect to pass along rising input costs, these costs, coupled with continued soft demand, are likely to pressure earnings in 2013. However, we still anticipate solid earnings for the year, and we are performing well during challenging circumstances. With our strong balance sheet, customer relationships, new product development capabilities, and efficient operations, we believe Tyson Foods is in the best position in our industry to succeed now and in the future.”
For the nine months ended June 30, the company as a whole sustained a 39% decline in income to $398 million, or $1.11 per share, which compared with income of $653 million, or $1.77 per share, in the same period a year ago.
“We’re often faced with challenges in our business, but our strategy will allow us to manage through trying times for continued success,” Smith said. “We are focused on growing our prepared foods, international poultry and value-added poultry businesses. We can’t make it rain, but we can execute against our strategy by producing high-quality foods using innovative and cost effective processes. It’s tough right now, but I’m confident we will come out of this in even better shape than we are in today.”