Source:  MEATINGPLACE.COM, 4/13/11

Lower-than-expected chicken pricing prompted BBT Capital Markets analyst Heather Jones to cut her profit estimate for Tyson Foods’ just-ended second quarter.

“The fiscal second-quarter operating environment for chicken was very difficult, given very high priced spot feed values and soft chicken pricing,” Jones wrote in a note to clients.

Jones trimmed her second-quarter estimate to 44 cents a share from 51 cents, noting the consensus estimate among Wall Street analysts is 43 cents.

Advantageous hedging has helped insulate Tyson from surging feed costs, Jones said, and the company took advantage of a mid-March price dip to extend hedges through the fourth quarter.

Jones projected chicken segment earnings of 2 cents per pound for Tyson, compared to an estimated loss of 8 cents per pound for the industry on average.

She remains more bullish about the company’s prospects in the second half of the year due to positive outlook for the pork business, improved pricing and restructuring savings, and she kept her full-year estimate for Tyson’s earnings at $2.09 a share.

Tyson’s red meat business should continue to benefit in fiscal 2011 and 2012 from strong international demand and tight supplies and capacity, she said.

For more stories, go to www.meatingplace.com.