Tyson Foods, the biggest U.S. meat processor, reported a better-than-expected quarterly profit on Monday as feed and livestock costs fell and raised its earnings forecast for the year.
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Shares of the company were up 4 percent at $70 in premarket trading and were set to open at a record high.
Feed costs have fallen in the United States as a global glut of corn and soybeans has kept grain prices depressed for three straight years.
Livestock costs are also falling as U.S. farmers build up their cattle herds, which hit a 63-year low in 2014 because of a drought.
Net income attributable to Tyson rose to $432 million, or $1.10 per share, in the second quarter ended April 2, from $310 million, or 75 cents per share, a year earlier.
Excluding items, the company earned $1.07 per share.
The company said it saved $80 million as a result of lower chicken feed costs in the quarter, while higher supplies of cattle and pork drove down livestock costs.
However higher supply of cattle and pork led to a drop in average sales prices resulting in an 8 percent fall in total sales to $9.17 billion.
Analysts on an average had expected earnings of 95 cents per share on revenue of $9.04 billion, according to Thomson Reuters I/B/E/S.
Tyson, whose brands include Jimmy Dean, Hillshire Farm and Ball Park, raised its forecast for full-year adjusted earnings to $4.20-4.30 per share from $3.85- $3.95 per share.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)