Tyson’s profits plunge
Having just announced the loss of approximately 1,500 jobs at one of its US beef plants (see www.leatherbiz.com, January 28), Tyson Foods Inc., which is said to be the world’s largest processor of beef, chicken, and pork, has reported a slump in profits for the first quarter.
Although sales improved to $6.8 billion from $6.6 billion in the same period of the prior year, operating income fell to $84 million from $145 million and net income slumped to $34 million from $57 million.
Despite the declines, Richard Bond, president and chief executive, remained fairly positive, stating: “Given all we've faced, we delivered a solid first quarter. Sales were up $200 million.” He added: “The Beef segment continues to face a very difficult operating environment, which caused us to make the hard decision to cease slaughter operations at our beef plant in Emporia, Kansas. There continues to be far more beef slaughter capacity than available cattle, and this is especially true for Emporia, as cattle production has moved from eastern to western Kansas.”
Beef accounted for 46.5% of the company’s net sales at $3.1 billion, with an operating loss of $85 million due to higher average live prices and operating cost inefficiencies, which were partially offset by increased average sales prices.
