For the third quarter ended June 29, 2013, the company reported net income of $249 million, or 69 cents per share, compared to $76 million, or 51 cents per share, in the year ago period. Sales for the quarter reached $8.7 billion, a record-high for the company.
"As expected, we are delivering robust results in the second half of our fiscal year." said Donnie Smith, Tyson's president and CEO. "We produced strong earnings of 69 cents per share while investing in our people, processes and new businesses and continuing to buy back stock. Our Chicken segment achieved record operating income, and our Beef segment rebounded to generate solid returns.
"We see a tremendous amount of opportunity in our business. I am very proud of the team because I'm seeing good long-term decision making to sustain us in the future, and that gives me confidence."
Tyson's Chicken segment had a strong performance, reporting $220 million in earnings for the latest quarter. Sales volumes increased on strong domestic and international demand for chicken. The higher sales offset increased feed costs of $105 million and $440 million for the third quarter and nine months, respectively.
The Beef segment rebounded with $114 million for the quarter. The segment also benefited from higher prices, strong demand and less volatility in live cattle markets.
Improved demand for pork wasn't enough to lift earnings in Tyson's Pork segment. Earnings for the quarter eased to $67 million from $69 million. Supplies of live hogs increased, which pushed down average sales prices and livestock costs.
"Sales volumes decreased as a result of balancing our supply with customer demand and reduced exports," the company reported. "While reduced compared to prior year, operating income remained strong in the nine months of fiscal 2013 despite brief periods of imbalance in industry supply and customer demand."
Operating income in Prepared Foods tumbled to $24 million, down from $47 million in the comparable year-ago quarter. Tyson attributed the decline to higher raw material costs and additional costs incurred through investments in the company's lunchmeat business.
"Because many of our sales contracts are formula based or shorter-term in nature, we are typically able to offset rising input costs through pricing," the company stated. "However, there is a lag time for price increases to take effect."
Tyson's outlook for fiscal 2014 includes an increase of 1 percent in overall domestic protein production (chicken, beef, pork and turkey). The company said improved weather conditions and "more ideal planting environment" should increase grain supplies, which should result in lower feed costs as well as decreased costs for cattle and hog producers. Capital expenditures, which are expected to be $550 million to $600 million for fiscal 2013, are expected to increase in fiscal 2014, to between $650 million and $700 million.
