Meat + Poultry - December 2008 - 37

On the bright side
Tyson's beef segment had an operating income of $106 million during the
year with results positively impacted by
higher average sales prices and net gains
from commodity risk-management activities. Sales in the segment were $11.7
billion for the year.
"The important thing to remember
about our beef business is that we've
turned it around from a $254 million
loss in 2006 to a $106 million gain for
2008," Bond told analysts.
The pork segment had an operating
income of $280 million and was impacted by higher average sales prices and
lower average live prices. Sales for the
segment were $3.6 billion.
"Producing in the three major proteins has proven to be a strategic advantage," Bond said. "The strong performance by our beef and pork segments
supported the chicken segment as it
struggled throughout the year due to
low prices and high input costs. Chicken lost $91 million in the fourth quarter
due to approximately $230 million in
additional grain costs over the fourth
quarter of 2007 and pricing that couldn't
keep pace with inputs. Our preparedfoods segment also delivered a disappointing quarter due to the high and
volatile cost of raw materials."

Since 1907

Within the foodservice segment,
Bond said the market continues to be
challenging, but quick-service restaurants continue to perform well given
the current market conditions. That is
positive for Tyson Foods because QSR
represents almost half of the company's
foodservice business and 80 percent of
its national accounts business.
"The segment that is hurting the most

"I never said we are
going to have a great
first half of the year. But
I am optimistic, very
optimistic, about the
back half of the year."
is mid-scale casual dining," he said. "And
there I would say that it's been a little
bit more discouraging in October, early
November than even what it was in the
August-September period."
In response, he said Tyson Foods
is working with customers to develop
value-oriented products in an effort to
stimulate traffic back to the casual-dining segment.
For the fourth quarter ended Sept.

27, the company posted net income
of $48 million, equal to 14c per share,
up 50 percent from $32 million, or 10c
per share, during the same quarter of
the previous year. Sales for the quarter were $7,201 million, up 10 percent
from $6,574 million during the same
quarter of the previous year.
"Currently, we are six weeks into
the new fiscal year, and we are facing multiple challenges," Bond said.
"Tight global credit is affecting exports
in the short term, however, we believe
the underlying demand for our protein products is still strong. While input-cost volatility and pricing pressure
continues in chicken, our team is making very good progress improving our
chicken business just as we improved
beef and pork."
Beyond the fi rst quarter of fiscal
2009, Bond said he is optimistic about
financial results during the second half
of the year.
"It's our Q3 and Q4 that we believe
will be significantly better," he said. "I
never said we are going to have a great
first half of the year. But I am optimistic, very optimistic, about the back half
of the year."
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Meat + Poultry - December 2008

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