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The Results of Oversupply: Tyson's Chicken

Econ101

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Tyson Foods reports quarterly loss



Yahoo! News

July 31, 2006



CHICAGO (Reuters) - Tyson Foods Inc. (NYSE:TSN - news), the nation's top meat producer, reported a quarterly loss compared with a year-earlier profit on Monday due to large meat supplies and disruptions in beef and chicken exports due to mad cow disease and bird flu.



The Springdale, Arkansas-based company reported a loss of $52 million, or 15 cents per share, for the fiscal third quarter ended July 1, compared with a year-earlier profit of $131 million, or 36 cents per share.



news.yahoo.com



Tyson Foods 3Q loss widens, outlook down



Yahoo! News

July 31, 2006



SPRINGDALE, Ark. - Tyson Foods Inc., the world's largest meat processor, on Monday reported a wider-than-expected loss in the third quarter, weighed by one-time charges and losses in the chicken and beef sectors.



The company also lowered its outlook for the year.



Loss for the quarter ended July 1 totaled $52 million, or 15 cents per share, compared with a profit of $131 million, or 36 cents per share during the same period.



Results were hurt by charges of 8 cents per share related to a legal settlement and plant closings.



Revenue dipped 5 percent to $6.38 billion, from $6.71 billion last year.



Analysts, on average, predicted a loss of 3 cents on revenue of $6.63 billion, according to a Thomson Financial poll.



The company said in a statement oversupply of chicken and forward sales of leg quarters led to a lower sales prices.



Beef results rose in May and June, but not enough to offset April performance.



Tyson said Canadian operations "continue to struggle," as the Canadian dollar remains strong.



The company, which has embarked on a $200 million cost savings plan, blamed the oversupply of meat on the market, as the industry continues to face falling demand partly because of persistent fears over avian flu.



"The third quarter remained challenging with losses in the chicken and beef segments," company president and chief executive Richard L. Bond said.



The company expects a loss of 41 cents to 51 cents for the fiscal year, down from previous guidance of between a loss of 25 cents and a profit of 10 cents.



Analysts are looking for a loss of 4 cents for the year.



Tyson also said it started a review of its tax account balances after noticing differences in deferred tax liabilities during renewal of some leases.



The company said the tax effect of the differences is an understatement of about $22 million. The company said it does not believe findings will not make a material difference on financial results. The review is expected to be complete by the end of October.



Shares fell 57 cents, or 3.9 percent, to $14 during premarket trading, after closing on Friday at $14.57 on the New York Stock Exchange.



news.yahoo.com
 

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