Meat + Poultry - June 2008 - 18

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Tyson Foods records loss
for second quarter
Tyson Foods Inc. recorded a loss of $5 million during the second quarter
of fiscal year 2008, ended March 29. The results compare unfavorably to
net income of $68 million, or 19c per common stock, the company earned
during the same period of fiscal 2007.
The second-quarter loss includes pre-tax charges of $47 million related
to plant closings and asset impairments, according to the company. During
the quarter, Tyson Foods restructured operations at its Emporia, Kan., beef
facility and closed its chicken processing facility in Wilkesboro, N.C. Sales
for the quarter were $6,612 million during 2008 compared with $6,501 million for the same period last year.
On a segment-by-segment operating income basis,
Tyson Foods' chicken and beef businesses sustained
losses of $61 million and $11 million, respectively, while
pork, prepared foods and other earned $63 million, $20
million and $33 million, respectively.
"Our pork segment did very well, delivering its best
January-March quarter ever," said Richard Bond, president and CEO of Tyson Foods. "Our chicken segment
Bond
suffered losses due to significantly higher and volatile
input costs."
Looking to the third quarter, Bond said he expects the beef segment to
improve as the summer grilling season gets under way and South Korea
starts to import U.S. beef.
"The pork segment should do well again, although not as well as the second quarter," he said. "In the chicken segment, we anticipate an additional
$100 million of increased grain costs over the second quarter, offset in part
by operational improvements, pricing and risk-management activities."
For the first six months of fiscal 2008, net income for the company was
$29 million compared with $125 million during the previous year. Sales for
the first half of 2008 were $13,378 million compared with $13,059 million.
Bond said for the year, corn and soybean meal increases are likely to approach $600 million. Including other inputs such as cooking oil, breading
and other feed ingredients, the increase in costs for the fiscal year may approach $1 billion compared to fiscal 2007.

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1,09

Technomic lowers foodservice
growth forecast

CSB-System

Technomic has lowered its 2008 foodservice industry nominal growth forecast to 2.2 percent from 3.6 percent as the result of current economic indicators
worsening.
The foodservice consultancy said some chain restaurants are still delivering
solid growth but limited-service restaurant growth has lowered significantly, and
full-service restaurants are facing even greater challenges.
"Retail hosts, including supermarket foodservice and c-stores, are one bright
spot," said Ron Paul, president. "We expect this group to enjoy solid 5-percent
growth this year - further evidence of our observation that consumers are 'trading down' to more economical foodservice alternatives."
Total foodservice retail sales in 2007 were $532.797 billion, which was 3.8 percent nominal growth.
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June 2008

MEAT&POULTRY

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Meat + Poultry - June 2008

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