Grainnet

Springdale, AR—Tyson Foods, Inc. (NYSE:TSN) reported Feb. 5 a first quarter net income of $160 million, up from net loss of $102 million in 1Q 2009.

Full Tyson Report

CEO Comments

"With more than half a billion dollars in operating cash flow, we generated a record first quarter EPS of $0.42 and drove down net debt by $400 million," said Donnie Smith, Tyson's president and chief executive officer.

"Beef, Pork and Prepared Foods continued to execute well, and Chicken began to show the improvement we've been working toward for more than a year," Smith said.

"Our team members did a great job of staying focused and making progress week after week.

"We're developing momentum that I believe will continue through the year and into 2011."

Fiscal 2010 Outlook

Chicken -- We expect seasonal demand will improve as we get further into fiscal 2010, and we expect the pricing environment to improve aided by cold storage inventories and pullet placements which are down relative to the levels we have seen over the last several years.

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.

Beef -- While we expect a reduction in cattle supplies of approximately 1% in fiscal 2010, we do not expect a significant change in the fundamentals of our Beef business as it relates to the previous few quarters.

We expect adequate supplies to operate our plants.

We will manage our spreads by maximizing our revenues through product mix and minimizing our operating costs, while keeping our focus on quality and customer service.

Pork -- We expect to see a gradual decline in hog supplies through the first half of fiscal 2010, which will accelerate into the second half of fiscal 2010, resulting in industry slaughter slightly higher than 2007.

However, we still believe we will have adequate supplies in the regions in which we operate.

We will manage our spreads by continuing to control our costs and maximizing our revenues.

Prepared Foods -- Raw material costs will likely increase in fiscal 2010, but we have made some changes in our sales contracts that move us further away from long-term fixed price contracts toward formula or shorter-term pricing, which will better enable us to absorb rising raw material costs.

However, in the second quarter fiscal 2010, we will see a negative impact until some price increases take effect.

For more information, call 479-290-6111.

See Related Websites/Articles:

• Tyson Foods
• Full Tyson Report

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