021111 Tyson Earnings Rise, Helped by IBP

Chicago - U.S. meat giant Tyson Foods Inc. said quarterly profits rose slightly as its acquisition of IBP's pork and beef unit offset pressure from weaker exports and the closure of some hog operations.

An industrywide slowdown in exports and increased output by U.S meat producers has resulted in falling prices and a glut of meat. But the company's IBP Inc. beef and pork unit, which it purchased last year, helped boost year-over-year revenue by nearly 15% in the most-recent quarter.

"These are not the best of times for the meat industry, but Tyson appears to have gotten through it O.K," said John McMillin, food industry analyst with Prudential Securities.

After the news, Tyson's shares rose more than 3% on the New York Stock Exchange even as the company lowered its forecast for the current fiscal quarter, citing the impact of the hog closures and other factors.

Springdale, Arkansas-based Tyson said earnings in its fiscal fourth quarter ended Sept. 28 rose to $84 million or 24 cents a share from $48 million or 22 cents a year ago. The company had an average of 354 million diluted shares outstanding in the quarter, up from 221 million a year ago.

The results included a $53 million charge to restructure its hog operations and to phase out the Thomas E. Wilson brand of beef and pork products. That was partly offset by a $22 million gain from the sale of its Specialty Brands Inc subsidiary, resulting in a net charge of 6 cents a share, Tyson said.

Excluding charges, Tyson had a profit of 30 cents a share, beating analysts' average forecast by 4 cents, according to market research firm Thomson First Call.

Revenue rose to $5.76 billion from $5.02 billion.

For its fiscal first quarter 2003, Tyson said it lowered its profit forecast to a range of 22 cents a share to 26 cents from its previous target of 26 cents to 30 cents to reflect a larger-than-expected operating loss from the closure of its hog operations.

In addition, it said prices for chicken leg quarters have been slow to increase after being hit earlier in the year by slower sales to Russia. That country represented about 35% of Tyson's total chicken exports for 2001.

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