"We are pleased that our overall performance in the fiscal third quarter was about what we expected it to be," said Donnie Smith, president and CEO of Tyson Foods. "The Pork segment's returns were above the new normalized range; the Beef segment was near the upper end of its range; and our Prepared Foods segment was just under its range.
"We feel good about our performance in the Chicken segment while experiencing extremely volatile input costs and market prices at or near historical lows. The fact that we remained profitable in such a difficult environment demonstrates how much our chicken business has improved in the past three years. There appears to be improvement in market fundamentals on the horizon, but the next few months will be very challenging, and it is likely our Chicken segment will experience a loss in the fiscal fourth quarter.
"My outlook for Tyson Foods remains positive. Our diversified business model, including our outstanding Beef and Pork segments, along with our strong balance sheet, will allow us to continue serving our customers through insights and innovations as we help them succeed in this economic environment, reinvesting in our business and buying back stock,” he added.
Tyson stated that its beef, pork and prepared foods business would not change significantly in the fourth quarter. However, it is expecting a loss in the chicken segment, due in part to the imbalance between available supply and consumer demand causing a weak market.
“For fiscal 2012, we expect industry production will decrease slightly from fiscal 2011 levels, which should gradually improve market pricing conditions,” the company said. “Current futures prices indicate higher grain costs in fiscal 2012 compared to fiscal 2011. We expect to offset a portion of the increased grain costs with operational, pricing and mix improvements.”
Source: Tyson Foods Inc.