Tyson Foods (NYSE:TSN) reported flat fiscal second-quarter profits on Monday as the largest U.S. meatpacker successfully balanced rising costs with higher prices.
The Springdale, Ark.-based meat and poultry company said it earned $159 million, or 42 cents a share, last quarter, matching its results from the year before. Analysts had been calling for EPS of 43 cents.
Sales climbed 16% to $8 billion, exceeding estimates for $7.54 billion. Hurt by higher grain costs, gross margins shrank to 6.7% from 8.2%.
“We produced record sales for the second quarter on substantially higher sales prices in addition to increased volume,” CEO Donnie Smith said in a statement.
Tyson said it increased its chicken revenue by 10% to $2.74 billion amid a 3.7% rise in prices and 6% growth of volume.
Looking ahead, Tyson said it expects fiscal 2011 sales to exceed $32 billion and earnings to be comparable with the year before.
“We will continue to face challenging and volatile market conditions in fiscal 2011, but we maintain our belief that earnings should be comparable to 2010 due to our on-going operational improvements and focus on execution,” Smith said.
Shares of Tyson Foods, which have rallied almost 10% in 2011, were inactive in Monday’s premarkets.