BOSTON, Sep 7, 2011 (GlobeNewswire via COMTEX) --
Due to continued strong performance by its beef and pork segments, Tyson Foods is still on track to deliver the second-best annual earnings per share in company history despite depressed chicken pricing, input costs at or near record levels and a sluggish economy, according to Donnie Smith, president and chief executive officer of Tyson Foods, Inc. (NYSE:TSN). Smith made his comments at the Barclays Capital 2011 Back to School Consumer Investor Conference today.
"The efficiency improvements we've made over the past several years have made our operations very competitive and delivered sustainable earnings improvement," Smith said.
To illustrate the turnaround in Tyson's chicken business since 2008, Smith said the chicken segment's 1% return on sales would have been nearly 10% had it not been for $250 million in additional grain and feed ingredient costs in the company's fiscal Q3 2011 vs. Q3 2010, and holding other factors equal. That would have been a record quarter, despite unusually low chicken prices.
"That's how much better we are as a producer, but it's hard for you to see because input costs outstripped those gains," Smith said. "However, industry fundamentals are beginning to improve, and that should support the pricing we need to offset our higher inputs."
Tyson will continue reinvesting in operational efficiencies to further improve the chicken segment's cost structure and competitive position, much like it did with its beef and pork segments. "I have to believe, given the economics of the chicken industry, we're the only company putting this kind of CapEx back into our business," Smith said. "When supply and demand get back in balance and this thing turns around, we're going to be in a great position. You have yet to see what our better, more efficient chicken business is capable of accomplishing in a favorable environment. Everything we've achieved, we achieved while running uphill against the wind."
About Tyson Foods
Tyson Foods, Inc. (NYSE:TSN), founded in 1935 with headquarters in Springdale, Arkansas, is one of the world's largest processors and marketers of chicken, beef and pork, the second-largest food production company in the Fortune 500 and a member of the S&P 500. The company produces a wide variety of protein-based and prepared food products and is the recognized market leader in the retail and foodservice markets it serves. Tyson provides products and services to customers throughout the United States and more than 100 countries. The company has approximately 115,000 Team Members employed at more than 400 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it.
The Tyson Foods, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3224
Forward-Looking Statements
Certain information contained in the press release may constitute forward-looking statements, such as statements relating to expected earnings per share, product pricing and overall performance. These forward-looking statements are subject to a number of factors and uncertainties, which could cause our actual results and experiences to differ materially from the anticipated results and expectations, expressed in such forward-looking statements. We wish to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Among the factors that may cause actual results and experiences to differ from anticipated results and expectations expressed in such forward-looking statements are the following: (i) the effect of, or changes in, general economic conditions; (ii) fluctuations in the cost and availability of inputs and raw materials, such as live cattle, live swine, feed grains (including corn and soybean meal) and energy; (iii) market conditions for finished products, including competition from other global and domestic food processors, supply and pricing of competing products and alternative proteins and demand for alternative proteins; (iv) successful rationalization of existing facilities and operating efficiencies of the facilities; (v) risks associated with our commodity purchasing activities; (vi) access to foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics; (vii) outbreak of a livestock disease (such as avian influenza (AI) or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to access certain domestic and foreign markets; (viii) changes in availability and relative costs of labor and contract growers and our ability to maintain good relationships with employees, labor unions, contract growers and independent producers providing us livestock; (ix) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (x) changes in consumer preference and diets and our ability to identify and react to consumer trends; (xi) significant marketing plan changes by large customers or loss of one or more large customers; (xii) adverse results from litigation; (xiii) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xiv) compliance with and changes to regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and safety laws; (xv) our ability to make effective acquisitions or joint ventures and successfully integrate newly acquired businesses into existing operations; (xvi) effectiveness of advertising and marketing programs; and (xvii) those factors listed under Item 1A. "Risk Factors" included in our October 2, 2010, Annual Report filed on Form 10-K.
This news release was distributed by GlobeNewswire, www.globenewswire.com
Tyson Foods, Inc.
CONTACT: Investors -
Ruth Ann Wisener, 479-290-4235
Media -
Gary Mickelson, 479-290-6111