Meat processor Tyson Foods Inc.(NYSE:TSN) posted 4.5 percent increase in second-quarter earnings on growth in sales.
Earnings attributable to Tyson were $166 million or $0.44 per share for the quarter, up from $159 million or $0.42 per share in the year-ago quarter.
Sales rose 3.4 percent to $8.3 billion.
Analysts, on average, polled by Thomson Reuters expected earnings of $0.39 per share on sales of $8.49 billion.
Gross margins contracted to 6.5 percent from 6.7 percent.
Tyson Foods, led by CEO Donnie Smith, is one of the world's largest processors and marketers of chicken, beef and pork. The company produces a wide variety of protein-based and prepared food products and is the recognized market leader in the retail and food service markets.
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"The chicken, pork and prepared foods segments all were in or above their normalized operating margin ranges, while Beef essentially broke even despite extremely challenging market conditions," Donnie Smith commented on second-quarter results.
Tyson Foods has been hit by decreased domestic demand for chicken and beef coupled with higher feed ingredient costs.
Sales volumes at beef and chicken segments declined 10.7 percent and 1.6 percent respectively, for the second quarter.
In the preceding first quarter, Tyson Foods' earnings declined to $156 million, or 42 cents a share, down from $298 million or 78 cents a share, in the same quarter last year. However, sales rose 9.4 percent to $8.3 billion on higher selling prices.
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Looking ahead for the full year, Tyson forecasts sales to approximate $34 billion , mainly driven by price increases related to decreases in domestic availability of protein and rising raw material costs.
For chicken segment, the company still expects industry production to fall about 4 percent for 2012 from last year levels. The company expects its beef segment to be profitable for the year, returning to its normalized range in the fourth quarter.
One of the company's key competitors is Hormel Foods (NYSE:HRL), which will report its second-quarter earnings on May 23. Wall Street expects Hormel Foods to earn 42 cents a share on revenue of $2.05 billion for the second quarter.
TSN shares closed Friday's regular trading at $18.04. The stock has been trading in the 52-week range between $15.60 and $21.06.