Tyson Foods Inc., the world's largest meat producer, said Monday a hefty impairment charge in its beef business left it with a loss for the fourth quarter but said its sales rose and its chicken business was profitable for the second straight quarter.
Chief Operating Officer Jim Lochner said he expects an improving economy will lead to improved demand next year for not only chicken, but beef and pork products as well.
The industry overall is improving on falling commodity costs and production cuts, which help bolster pricing.
Tyson lost $455 million, or $1.22 per share, for the three months ended Oct. 3. That compares with a profit of $48 million, or 13 cents per share, a year ago.
Excluding the impairment charge of $1.50 per share, earnings were 28 cents per share. The company said recent disruptions in the global credit markets and weaker economic conditions forced it to reduce the goodwill valuation of its beef business.
Sales rose slightly to $7.21 billion from $7.2 billion, with chicken sales up 11 percent to $2.64 billion from $2.38 billion.
The performance beat the expectations of analysts surveyed by Thomson Reuters, who forecast a profit of 26 cents per share on revenue of $6.88 billion.
Tyson, based in Springdale, Ark., anticipates better chicken prices in 2010 on lower cold storage inventories and expects grain prices to fall.
Raw material costs are predicted to climb for the prepared foods segment, but Tyson said it has shifted its sales contracts away from fixed pricing, which will help absorb the increasing costs.
Last week, Tyson Foods named a new CEO to replace interim head Leland Tollett, who had been tapped in January to help weather an industry downturn.
The new CEO is Donnie Smith, Tyson's senior group vice president of poultry and prepared foods.