SPRINGDALE, Arkansas (AP) — Tyson Foods' net income jumped 86 percent jump its fiscal first quarter, helped by improving chicken sales and rising prices for beef and pork, the meat producer said Friday.
Tyson shares climbed 8 percent to $18.95 in premarket trading Friday.
The improvement is a strong signal the meat producer, based in Springdale, Arkansas, has recovered from an industry downturn brought on by a combination of higher production costs and slumping demand as shoppers cut spending.
Net income climbed to $298 million, or 78 cents per share, in the three months ended Jan. 1. That's up from $160 million, or 42 cents per share, a year earlier.
Even excluding a one-time gain of 3 cents per share related to an asset sale, earnings topped the average forecast from analysts surveyed by FactSet of 62 cents per share. Tyson Foods Inc.'s revenue climbed 15 percent to $7.62 billion. Analysts expected $7.16 billion.
Results improved across all segments, including chicken, beef and pork. The average price of chicken fell less than 1 percent, but that was offset by a 16 percent increase in beef prices and a nearly 24 percent rise in pork prices.
Chicken volume rose 8 percent, beef volume edged up nearly 1 percent and pork volume rose about 6 percent.
In 2011, the company expects its production to increase slightly, but not outpace export growth. That means total U.S. supply should fall slightly, it said, which means helps the prices Tyson gets for fresh meat.
Tyson expects chicken production will fall slightly to match supply with customer demand. Rising grain prices will be offset by cost cuts.
Beef supplies will fall 1 percent to 2 percent in fiscal 2011, and pork supply is expected to be even with 2010.