UPDATE: Tyson Foods 1Q Earnings Beat Expectations

Tyson Foods Inc. of Springdale on Friday reported first-quarter net income attributable to the company down about 48 percent to $156 million or 42 cents per share from $298 million or 78 cents per share during the same quarter last year.

The world’s largest meat processor (NYSE: %%TSN%%) said quarterly revenue rose 9 percent to $8.3 billion from $7.6 bilion during the same quarter a year earlier.

Despite the net income decline, Tyson beat analysts’ earnings expectations of 33 cents per share.

"Even with higher feed ingredient costs, our chicken segment returned to profitability in the fiscal first quarter on improved pricing and execution," Donnie Smith, Tyson’s president and CEO, said in a news release.

"Prepared foods had a strong performance, and the pork segment continued to produce outstanding results. Our beef segment is experiencing a rough patch as a result of challenging market fundamentals. Although we are still outperforming industry indexes, if current conditions continue, our beef results will be pressured in our second quarter," he said.

Each of Tyson’s segments — beef, pork, prepared foods and chicken — posted year-over-year revenue increases. But operating income for each segment except prepared foods fell year over year.

Rising Costs

For the fiscal year, Tyson expects a decline in the availability of most of its protien products, which it expects to boost prices. Tyson said fiscal 2012 sales to exceed $34 billion, "mostly resulting from price increases related to decreases in domestic availability of protein and rising raw material costs."

Those rising material costs have already been showing up on Tyson’s balance sheet. In the first quarter, Tyson said operating results were affected by increases in grain and feed ingredients costs of $220 million and other growout operating costs of $30 million. About $25 million of those costs wre offset by operational efficiencies and improved mix and pricing.

New Directors

Also, at its annual shareholders meeting Friday at the Holiday Inn Convention Center, Tyson Foods elected nine people to its board of directors.

The board members are chairman John Tyson, Kathleen M. Bader, Gaurdie E. Banister Jr., Jim Kever, Kevin M. McNamara, Brad T. Sauer, Robert Thurber, Barbara A. Tyson and Albert C. Zapanta.

Shareholders also reapproved the performance goals for the company’s stock incentive plan and ratified the selection of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the fiscal year ending Sept. 29.

A representative from the Humane Society of the United States, which is a company stockholder, was expected to speak at the meeting about the use of gestation crates to confine breeding sows in Tyson’s supply chain. But Smith said in a conference call with the media after the meeting that the representative was present but did not speak.