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Tyson 3Q tops mark
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July 30, 2001: 9:58 a.m. ET
Biggest U.S. poultry processor posts 50% lower profit but beats estimate
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NEW YORK (CNNfn) - Tyson Foods' third-quarter results were slashed in half from a year ago yet came in ahead of Wall Street expectations as higher sales helped the world's biggest poultry processor offset high operating costs.
For the quarter ended June 30, Tyson (TSN: up $0.05 to $10.45, Research, Estimates), which agreed to acquire meat processor IBP Inc. (IBP: up $0.18 to $26.65, Research, Estimates) for $3.2 billion earlier this year, reported earnings of $19.4 million, or 9 cents a share, down from $40.5 million, or 18 cents a share, a year earlier. Analysts on average anticipated a profit of 7 cents a share, according to earnings tracker First Call.
Third-quarter sales increased 4.6 percent to $1.9 billion from $1.8 billion.
"While our performance was at the high end of our previous guidance, we clearly did not perform to our potential," Chairman John Tyson said. "Our focus is on improving our operational execution and expense management to more fully benefit from our improving sales mix. We simply have to get more money to the bottom line."
Food service sales increased 2 percent in the quarter thanks to a change in the product mix that commanded higher prices, yet profit in the segment declined $6.3 million from a year ago.
Consumer products sales were flat compared with a year earlier while international sales increased 55 percent as the company recorded double-digit volume growth overseas. Tyson said an outbreak of Exotic Newcastle disease in the year-ago quarter at Tyson de Mexico hurt sales, making comparisons easier in the 2001 second quarter.
Swine sales decreased 32.4 percent.
Tyson tried to back out of the IBP deal in March, citing numerous breaches of the merger agreement and questions about accounting irregularities at an IBP subsidiary. But in June, a Delaware court ordered Tyson to proceed with the deal.
Tyson beat out Smithfield Foods (SFD: down $0.10 to $44.71, Research, Estimates) to acquire IBP since together, IBP and Smithfield would have controlled nearly 40 percent of the pork industry.
Tyson, which supplies chicken to McDonald's (MCD: up $0.08 to $28.72, Research, Estimates) and KFC, employs 68,000 people and 7,000 farmers worldwide. The company also is the third-largest producer of corn and flour tortillas under the Mexican Original brand. 
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