Source:  Chris Scott, MEATINGPLACE.COM, 11/16/10

Higher profitability in pork will protect Tyson Foods from projected issues in its chicken operation in fiscal 2010, while Sanderson Farms should prepare for a wild ride in stock prices in the coming weeks, according to Stephens Inc. Equity Research Analyst Farha Aslam.

She raised Tyson’s earnings estimate to $2.14 per share from $2.03, citing “excellent pork profitability” in the fourth quarter. The pork segment is expected to contribute as much as 16 percent of the company’s sales and 26 percent if its earnings before interest and taxes in fiscal 2010. However, Aslam also lowered its projection for Tyson’s fiscal 2011 earnings to $1.75 per share from $1.90 as a result of higher grain prices that are expected to negatively affect Tyson’s poultry segment. Tyson is scheduled to release its latest earnings report next Monday.

Aslam also said the outlook was not as rosy for Sanderson Farms, and lowered her projection for fiscal 2011 earnings to $3 a share from $4.53. Higher grain costs, lower Russian export prices and concerns about future poultry supply were cited as factors.

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