990521 Tyson Profit Nearly Triples As Sales Slip

Springdale, AR - Tyson Foods Inc. said its second quarter earnings nearly tripled to $64.6 million, beating Wall Street expectations, even as sales dipped 1.6%.

Tyson's profit rose to 28 cents per share for the quarter ended April 3 from 10 cents per share, or $23.3 million, a year ago and came in a penny ahead of the consensus expectation among Wall Street analysts polled by the research firm First Call Corp.

Sales, however, slipped to $1.84 billion from $1.87 billion. But excluding sales from non-core businesses sold before the second quarter and sales from its Mexico operations, which had not been consolidated in last year's period, Tyson said comparable sales from continuing operations rose 1.5%.

The improved results were helped by significantly higher gross margins, which rose to 17.5% from 14.4% last year as its cost of sales fell more than 5%. Selling expenses also fell nearly 6%.

Its poultry gross margin, excluding Tyson de Mexico, jumped more than 5 percentage points to 18.6% on lower feed costs.

"I am pleased to see our chicken business continue to experience fundamental improvements, although the favorable costs of grain have been partially offset by the lower value for leg quarters," Tyson Chief Executive Officer Wayne Britt said in a statement.

"Our results have been negatively affected by difficult operating conditions experienced by our pork group, although industry conditions show signs of improvement," Britt said.

Late last month, Tyson was chastised as a poor corporate performer by the largest U.S. public pension fund, the California Public Employee's Retirement System, or CalPERS.

Pension fund operators praised the company's new managers for running Tyson less like a "family fiefdom" but called on them to listen better to shareholders and to revise its dual-class stock structure.

"I am pleased with the progress our management has made the last six months,' Tyson Chairman John Tyson said in a prepared statement.

Shares in Tyson were up 50 cents in morning trading on the New York Stock Exchange, selling at $21.19.

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