Tyson Foods reports 4% increase in Q2 net income

US-based Tyson Foods has announced a net income in the second quarter of 2012 of $166m, a 4% increase from $159m in the previous year, as weak performance of its beef business was offset by strong growth across its other businesses.

Sales increased 3% to $8.3bn, compared to $8bn in 2011. The company, which sells beef, pork, chicken and prepared foods, implemented higher pricing actions to overcome feed prices and maintain profit margins, which led to 4.3% decline in sales volumes.

Tyson’s president and chief executive officer Donnie Smith said that the chicken, pork and prepared foods divisions were in or above their normalised operating margin ranges, while beef essentially broke even despite difficult market conditions.

"We’re positioned for another great year as we expect to gain momentum in our third and fourth quarters," Smith added.

The beef segment posted an operating loss of $1m, and a 10.7% decline in sales volume to $3.37bn, as a controversy over a ground beef filler, dubbed as pink slime by critics, affected the demand for beef and ground beef.

The chicken segment reported an operating income of $145m, up from $37m the previous year, and a 1.6% increase in sales volume to $2.9bn.

The pork division’s operating income totalled $115m, down from $146m the previous year, while its sales volume declined marginally by 0.1% to $1.37bn.

The company’s prepared foods segments reported an operating income of $44m, up from $31m the previous year, and a 1.2% increase in sales volume to $807m.

Tyson Foods predicts the domestic production of chicken, beef, pork and turkey to decline by 2%-3%, compared to 2011, which should help improve pricing in the 2012 year.

Image: Tyson Foods implemented higher pricing actions to overcome feed prices and maintain profit margins, which led to 4.3% decline in sales volumes. Photo: Tyson Foods.