The moves made over the last 12 months by meat and poultry processor Tyson Foods to attempt to get costs better under control appear to be gaining traction, as the Springdale, Ark.-based company today reported first-quarter earnings that were better than expected, according to numerous sources.
Tyson said its chicken business, which posted an adjusted income of $192 million, has benefitted from the closure of nearly half a dozen U.S. plants in the last year. In addition, the company’s Prepared Foods division continued to thrive, reporting an adjusted income of $264 million for the quarter. Nevertheless, the company also warned it was still making its way through a tough landscape.
“We’ve taken some steps in the right direction, but we have a lot of work to do,” CEO Donnie King reportedly told participants in a conference call on the results. For instance, the company’s beef business reported a loss, hindered by still-rising prices and cattle supply constraints.
CFO John R. Tyson told Reuters that more plant closures remain a possibility as Tyson continued to analyze and respond to uncertainty across the market. Adjusted operating income did still fall in Q1, some 9.2%, to $411 million.
The beef business reported a $117 million loss, well off the $129 million income the unit posted a year ago. A slide in cattle futures cost the company inventory losses of approximately $56 million, the report said.
Beef sales were up 6.4% for the company, and prices shot up 10.5%, but beef volumes slipped 4.1%. Meanwhile, the pork business climbed 7.7% higher than a year ago, even as prices plunged 8.5%.