Tyson returns to profitability in 2Q

SPRINGDALE, Ark. -- Meat producer Tyson Foods Inc. returned to profitability in its second quarter on improvements in its chicken business and higher beef and pork revenue.

The results reported on Monday topped analysts' estimates, and its shares rose 88 cents, or 4.7 percent, to $19.50 in pre-opening trading.

Shares of poultry producers were stung last week when competitor Pilgrim's Pride Corp. said it would raise production by 10 percent in the next two years. That could pressure prices lower.

But Tyson CEO Donnie Smith said he expect his company will do even better in the second half of this fiscal year and likes the way its third quarter is going as the summer grilling season gets started.

"We are very happy with these results, especially because our fiscal second quarter is typically not our best," Smith said in a statement.

Tyson earned $156 million, or 42 cents per share, for the three months ended April 3. That's a reversal from a net loss of $119 million, or 32 cents per share, a year earlier.

Revenue climbed 10 percent to $6.92 billion from $6.31 billion.

Analysts surveyed by Thomson Reuters predicted lower earnings of 34 cents per share on revenue of $6.54 billion. These estimates normally remove one-time items.

Tyson's chicken division, which has been hit by oversupply and consumers' spending cuts, reported $2.49 billion in revenue compared with $2.36 billion a year ago on increased average prices. Grain costs rose by $19 million in the quarter.

Beef revenue climbed to $2.76 billion from $2.42 billion, helped by higher export sales volume and better operating margins. In the pork segment, revenue increased to $929 million from $844 million partly on improved operating margins.

The prepared foods unit also posted better revenue, as sales climbed to $734 million from $684 million on improved sales volume and increased average prices.