LITTLE ROCK — Tyson Foods Inc. of Springdale reported Friday that its net income rose 11 percent in the first quarter of its 2013 fiscal year, which ended Dec. 29, reaching $173 million compared with $156 million for the same period a year ago.
The company also said it has invested more than $40 million in four plants that it expects collectively to lead to almost 500 new jobs.
However, Donnie Smith, president and chief executive officer, cautioned in a conference call with industry analysts that rising feed costs, due in part to lingering drought conditions, could weigh on future earnings. Feed costs in the company’s chicken business rose by $170 million, Smith said.
Net income per share for the first quarter was 48 cents, up from 42 cents a year ago. The average estimate of 13 analysts surveyed by Bloomberg News was 42 cents. Zacks Equity Research’s consensus estimate was 39 cents a share.
On Friday, Tyson reported $8.4 billion in sales, up from $8.33 billion compared with the same period a year ago.
The company said it repurchased 5.1 million shares in the first quarter and paid out $53 million in dividends.
During the conference call, Smith said that retail demand is basically flat and fluctuates depending on gasoline prices. Food service also is flat, he said, but added that he expects that sector to increase. Ground beef sales are up, he said, but total meat sales are down.
By sector, Tyson said:
Total chicken sales volumes decreased despite increases in domestic and international production.
Beef sales declined as fed cattle supplies decreased, driving up cattle prices.
Live hog supplies increased, driving down prices, but sales volumes decreased as the company balanced supply with customer demand.
Prepared foods volume increased, but operating income decreased in part because of costs incurred as the company invested in the lunch-meat business.
Plants that were the target of the $40 million investment were a Goodlettsville, Tenn., operation that produces pork cuts, ground beef and beef cuts, including closely trimmed beef cuts, and received $7.7 million and up to 100 new employees; a Sherman, Texas, plant that produces beef, ground beef and pork products, and received $5.6 million and about 70 new employees; a plant in Glen Allen, Va., that saw a $14 million expansion and about 120 additional employees; and a Jacksonville, Fla., processing facility where $13 million is being spent and that employs more than 50 people but is anticipated to eventually employ up to 200 with the renovations.
During trading Friday, Tyson’s stock closed at $22.80, up 68 cents, or 3.1 percent, on the New York Stock Exchange.
The stock has traded between $14.07 and $22.86 in the past year.
Business, Pages 29 on 02/02/2013