WASHINGTON (dpa-AFX) - Meat products producer Tyson Foods, Inc. (TSN) reported Friday a profit for the first quarter that nearly halved from last year, reflecting a significant drop in margins amid higher costs. Meanwhile, the chicken segment returned to profitability this quarter. Both earnings per share and quarterly revenues topped analysts' expectations. The company also reaffirmed its revenue guidance for the full-year 2012. 'Even with higher feed ingredient costs, our Chicken segment returned to profitability in the fiscal first quarter on improved pricing and execution. Prepared Foods had a strong performance, and the Pork segment continued to produce outstanding results. Our Beef segment is experiencing a rough patch as a result of challenging market fundamentals,' President and CEO Donnie Smith said in a statement. The Springdale, Arkansas-based Fortune 500 company reported net income of $156 million or $0.42 per share for the first quarter, lower than $298 million or $0.78 per share in the prior-year quarter. On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.33 per share for the first quarter. Analysts' estimates typically exclude special items. Sales for the quarter increased 9.4 percent to $8.33 billion from $7.62 billion in the same quarter last year, and topped thirteen Wall Street analysts' consensus estimate of $8.30 billion by a whisker. 'Although we are still outperforming industry indexes, if current conditions continue, our Beef results will be pressured in our second quarter,' Smith noted. Operating margin for the quarter slumped 320 basis points to 3.3 percent, and gross margin contracted 390 basis points to 5.9 percent from last year. The company noted that its chicken segment returned to profitability in the first quarter, and expect it to strengthen throughout the year. Meanwhile, the beef segment remained profitable in the first quarter and will continue to be so in fiscal 2012. However, it is challenged by volatile market conditions, which is expected to improve throughout the second-half 2012. The pork segment expects results to remain above the company's normalized range for the balance of the fiscal 2012, and do not expect the remainder of the year to be at first quarter levels. The company also expects results at the prepared foods segment to remain within its normalized range for the balance of the fiscal year. Looking ahead to fiscal 2012, Tyson Foods expects sales to exceed $34 billion mostly due to price increases associated with the rising raw material costs and decreases in domestic availability of protein. Street is currently looking for full-year 2012 revenues of $35.52 billion. 'Our Q1 results demonstrate that we are competitive and that our multi-protein, multi-channel, multi-national business puts us in a position to deliver sustainable earnings over time,' Smith added. TSN closed Thursday's regular trading session at $18.62, up $0.03 on a volume of 8.28 million shares, higher than the three-month average volume of 4.02 million shares.
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