Tyson Foods set course for a "much better year" in 2010 after posting only its second annual loss in 15 years, weighed down by a slip in sales and a one-off $560m charge.
The meat giant, which is in the process of losing its crown as world leader to Brazil's JBS, reported an after-tax loss of $537 for the year to September 27 compared with earnings of $86m a year before.
Sales slipped $158m to $26.7bn, despite an extra week in the group's financial year.
However, Tyson said it had ended the year on a high, with all four divisions running at an operating profit in the fourth quarter.
'Matter of execution'
The beef, pork and prepared foods units were operating "very well", with "measures in place" to bring the chicken business back to historic performance levels, said Donnie Smith, who was appointed the group's chief executive last week.
"The team knows what to do, and now it's a matter of execution," he added.
Jim Lochner, who was promoted to fill the newly-created post of chief operating officer, and will take charge of day-to-day management said he expected measures undertaken to improve the chicken division "to manifest themselves".
The unit would be helped by enhanced pricing power, given a fall in cold storage stocks, and a fall in grain costs.
For the group, "fiscal 2010 should be a much better year," Mr Lochner said.
"There is potential for good demand improvement as the global economy recovers."
Huge writedown
In the fourth quarter, Tyson swung to a $455m after-tax loss compared with earnings of $45m a year before, hurt by a change in accounting for goodwill, a measure of the value of intangible assets such as brands, and a term which typically becomes relevant to acquired assets.
The global economic recession has prompted Tyson to "make a significant increase" – to 10.1% from 9.3% - in the rate at which it writes down goodwill in its beef division, leading to a $560m charge affecting both the fourth quarter and the financial year.
Nonetheless, earnings per share of $0.28, excluding one-offs, beat Wall Street forecasts of a $0.26-per-share result.
Deutsche Bank restated its "hold" rating on Tyson stock, saying the group's comments on 2010 prospects "came in within our expectations, with management pointing to supply discipline and lean inventories in chicken".
Tyson shares closed down 1.5% at $12.88 in New York.
PRINTABLE VERSION
EMAIL TO A FRIEND
RSS FEEDS