Tyson Boosts First-Quarter Earnings, Prepares for $8 Million Upgrade of Pennsylvania Poultry Processing Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Tyson Foods (NYSE:TSN) (Springdale, Arkansas) recently reported earnings for the first quarter of the company's 2010 fiscal year, which ended January 2, 2010. Both sales and net income were up from 1Q09. Net income for the company was $159 million, compared to a loss of $104 million in 1Q09. While sales were up only 1.75% from the first quarter of 2009, operating income rose from a loss of $198 million in 1Q09 to a profit of $314 million in 1Q10.

The gain in profit comes primarily from the company's Chicken segment, which moved from a loss of $286 million in the first quarter of 2009 to $78 million of profits in 1Q10. "In the first quarter of fiscal 2010, the Chicken segment posted an operating income of $78 million and operating margin of 3.2%, compared to a negative $286 million and minus 12.8% in the first quarter of fiscal 2009," said Chief Operating Officer Jim Lochner in a conference call regarding the earnings.

The cost of grain rose significantly in the 2008 and 2009 fiscal years, severely impacting earnings in the company's Chicken segment. Grain costs for the quarter were down $84 million year over year. In a company press release, Tyson said, "We also currently expect to see grain costs down as compared to fiscal 2009. Additionally, we will continue to focus on making operational improvements to help maximize our margins."

Industrial Info is currently tracking $19.5 million of upgrade, renovation and expansion projects belonging to Tyson that are under way or set to begin this year, the majority of which involve poultry processing plants. In March, plant upgrades are set to begin at the company's poultry processing plant in New Holland, Pennsylvania. The upgrades will occur for both the building and equipment at the plant, which has been in operation since 1969. Information on these and other projects can be found in Industrial Info's Food & Beverage Industry Database.

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