Tyson Swings to Loss

A 'supply and demand imbalance' continues to hurt chicken and beef sales.
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Meat producer

Tyson Foods

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swung to a fiscal fourth-quarter loss, hurt by charges and a continued drop in sales of beef and chicken.

For the quarter ended Sept. 30, Tyson recorded a loss of $56 million, or 17 cents a share, compared with a year-earlier profit of $117 million, or 33 cents a share.

Sales fell to $6.47 billion from $6.5 billion, as lower chicken and beef sales offset a 1% rise in sales of pork.

The Springdale, Ark., company's bottom-line results were weighed down by charges totaling $23 million, or 4 cents a share, tied to plant closings and other consolidation-related moves. Tyson also recorded 4 cents a share in charges related to a reconciliation of tax items, as well as charges of 2 cents a share from changes in accounting.

Analysts polled by Thomson First Call anticipated a loss of 4 cents a share, before items, and sales of $6.45 billion.

"The best thing I can say about fiscal 2006 is, it's over," said Richard Bond, president and chief executive, in a statement. "For most of the year, we were plagued by supply and demand imbalance as well as export market disruptions in our chicken and beef segments. Despite some continuing problems in the protein sector, during the quarter our core business showed improvement and continued to strengthen."

Bond, who was installed as CEO earlier this year, said Tyson expects to return to profitability in the current quarter. For all of fiscal 2007, the company expects earnings of 50 cents to 80 cents a share.

Analysts have an average estimate for earnings of 69 cents a share.