Tyson Foods reported an increase in sales for its chicken segment but a decrease in operating income for the first quarter of fiscal year 2019, the company reported on February 7.
For the quarter, which ended December 29, 2018, Tyson Foods reported a year-over-year decline in net income, going from a net income of $1.63 billion during the first quarter of fiscal year 2018 to a net income of $551 million during the most recent quarter.
Broken down by segment, Tyson reported increased operating income for its beef and prepared foods segments, but a decline in operating income for its chicken and pork segments.
Chicken segment performance
Tyson Foods’ chicken segment for the first quarter saw its sales rise from about $2.997 billion to $3.115 billion on a year-over-year basis, but its operating income drop from $272 million to $160 million.
The company reported that the increase of sales volume was primarily due to incremental volume from business acquisitions. Tyson concluded the acquisition of Keystone Foods during the first quarter, while it completed the acquisition of Tecumseh Poultry in June 2018.
The average sales price for chicken decreased due to sales mix primarily associated with the acquisition of the rendering and blending assets of American Proteins and AMPRO Products during the fourth quarter of fiscal year 2018, Tyson reported.
The company partially attributed the decline in operating income due to increased operating and labor costs, as well as higher feed ingredient costs and current market conditions.
Other segment results
Tyson Foods prepared foods segment saw a year-over-year increase operating income, going from $256 million to $265 million, while its beef segment’s operating income forse from $256 million to $305 million. The pork segment’s operating income declined from $151 million to $95 million.
“The prepared foods and beef segments delivered strong results in our fiscal first quarter, while the pork and chicken segments performed well, given market conditions,” Tyson Foods President and CEO Noel White said in a press release.
