Tyson Foods reports 42.7% decline in Q2 2013 net income

US-based Tyson Foods has reported that its net income for the second quarter of 2013 decreased by 42.77% to $95m, compared with $166m for the same quarter in 2012.

The net earnings for the quarter declined due to higher feed costs and many shoppers and restaurants switching from beef to chicken.

Tyson Foods stated that the higher priced beef products, particularly premium cuts and Angus varieties, experienced decreased sales.

With the decline in income for the quarter, Tyson lowered its full-year net sales estimate to about $34.5bn from its November forecast of $35bn.

For the quarter ended 30 March 2013, the company posted a 1.8% increase in net revenues to $8.41bn, compared with $8.26bn a year ago.

Tyson Foods president and chief executive officer Donnie Smith said that the second quarter is usually the most challenging.

"However, our business is structured to withstand adverse conditions, and we worked through the issues while positioning ourselves for what we believe will be a strong performance in the second half of the year," Smith added.

Segment-wise, the company’s Chicken division posted a 6.3% increase in sales to $3.1bn, on a 6.2% rise in average prices, while chicken volumes were up 0.1%.

The company’s Beef segment posted 2.3% rise in sales to $3.44bn driven by 6.5% increase in average prices, while volumes were down by 3.9%.

The Pork segment revenues declined 4.4% to $1.31bn as volume and averages prices each decreased by 2.2%.

Sales of the Prepared Foods division decreased by 0.5% to $803m, volumes were down 0.8% and averages prices increased 0.3%.

For the six-month period, the company’s net earnings declined 16.7% to $268m, compared with $322m in 2012, while net sales were up 1.8% to $16.8bn, compared with $16.5bn for the same period a year ago.

For the full-year 2013, Tyson Foods expects net sales of approximately $34.5bn, capital expenditures of about $550m-$600m and net interest expense of approximately $140m.

---

Image: Higher feed costs were a factor in the decline of Tyson Foods’ net earnings for the second quarter of 2013. Photo courtesy of Tyson Foods, Inc.