Chicken operating income was $181 million, representing 6.9% of total sales. "Tyson produced record sales and earnings for the fiscal first quarter of 2011," said Donnie Smith, Tyson president and CEO. "The chicken, beef and pork segments produced operating income in or above their normalized ranges. With strong operating cash flows, we reduced our net debt to a 10-year low of $1.4 billion, down $132 million from the fiscal fourth quarter of 2010. Return on invested capital was strong at 26%."
Looking at the whole of 2011, Tyson expects chicken production to increase from 2010 levels and is preparing for the effects of increased grain prices on business. "We expect our operating margins will be lower for the remainder of fiscal 2011, as compared to the first quarter fiscal 2011," said Smith. "Unlike fiscal 2008 when the industry experienced a similar production and grain cost environment, we expect to remain profitable during the remainder of fiscal 2011. Our expectations are based on the significant operational improvements of approximately $600 million realized since 2008. Additionally, a significant portion of our increased capital expenditures focused on spending for production and labor efficiencies, yield improvements and sales mix flexibility. These improvements, which began in late fiscal 2010 and are scheduled to continue into fiscal 2011, are expected to result in an additional $200 million of savings in fiscal 2011."