"This quarter's results reflect the depressed markets and the oversupply of all proteins. The beef segment suffered from low capacity utilization and declining boxed beef prices. The negative effect of high live cattle prices and lower sales prices was made worse by interruptions in export markets. Those factors combined to produce significant losses in the beef segment. The protein oversupply, in addition to higher operating costs, affected our pork segment as well," Tyson said in a prepared statement.
Tyson Foods, Inc. today reported a loss of 37 cents per diluted share for the second fiscal quarter ended April 1, compared with 21 cents diluted earnings per share in the same quarter last year. Second quarter 2006 sales were $6.3 billion compared with $6.4 billion for the same period last year. Operating loss was $141 million compared to operating income of $183 million, and net loss was $127 million compared to net income of $76 million, for the same period last year.
However, Tyson continued, the company's chicken segment stayed in "positive territory." He attributed this to the company's value-added products and effective management of controllable costs.
"Also, I am encouraged by our prepared foods segment margins which, when adjusted for plant closings, continue to move in the right direction," he said.
Tyson said he expects the impact of the oversupply of protein to lessen in the second half of the year and he anticipates the third and fourth quarters to be better as demand improves, but, he cautioned, "they still will be difficult."
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