The company reported Q2 sales of US$8.3bn, up 3.4% year-on-year, with an operating income of US$145m for chicken (5% of sales), US$115m for pork (8.4% of sales) and US$44m for prepared foods (5.5% of sales), while the beef segment registered an operating loss of US$1m (0% of sales).
Tyson’s president and CEO Donnie Smith said: “Our multi-protein business again proved advantageous, producing solid earnings for the fiscal second quarter. We were pleased with the rate of improvement in our chicken business. The chicken, pork and prepared foods segments all were in or above their normalised operating margin ranges, while beef essentially broke even despite extremely challenging market conditions.
“We’re positioned for another great year as we expect to gain momentum in our third and fourth quarters.”
Tyson said its 3.1% rise in operating income in the first six months of fiscal 2012 had been positively impacted by increases in average sale prices, improved mix and operational improvements. But these were partially offset by increased feed and ingredient costs.
Despite the ‘pink slime’ scandal that shook the American industry in the past few months, Tyson said its beef segment remained profitable in the first six months of this year, but that volatile market conditions and reduced beef demand had made it difficult to pass along increased input costs. However, the company believes the difficult margins conditions experienced in the past few months will recover throughout the second half of the fiscal year “due to improved cattle supplies and typical seasonal demand”.
Tyson expects decreased national production in all species, along with maintained export demand, to support improved pricing in the remainder of 2012.