OVERALL, quarterly sales for Tyson Foods Inc. exceeded the $9.0 billion mark for the first time, increasing 7.7% from the second quarter of 2013.
A large gain in the chicken segment was credited for improved second-quarter financial results for the company.
Furthermore, Tyson's net income for the quarter was $213 million, up 124% from the year before. Net income for the six-month period totaled $467 million, surpassing the $268 million posted in 2013, while sales were $17,793 billion.
"We had a record second quarter, which is a testament to our great team and our balanced multi-protein, multichannel, multinational business model," Tyson president and chief executive officer Donnie Smith said. "Our second quarter is usually our most challenging. We had a lot to overcome, including a harsher-than-normal winter, but I'm satisfied with the results."
Due to strong demand, growth in sales volumes for chicken products contributed to Tyson posting a record for the second quarter. Moreover, the lower cost of feed ingredients resulted in a slight decrease in the average sales price for chicken.
Improvement in domestic demand for U.S. pork boosted Tyson's sales volumes in the second quarter, although for the six-month period, sales volumes decreased due to a reduction in export sales.
In addition, the average sales prices increased as a result of lower total hog supplies, which increased the company's input costs, according to Tyson's financial report.
On the other hand, beef sales volumes decreased in the second quarter due to a drop in the number of live cattle processed. Similar to hogs, the average price of beef rose due to limited beef supplies.
Tyson's management optimistically forecasted slightly better returns in the last half of 2014 and the start of 2015.
According to the financial report, Tyson estimated overall domestic meat and poultry production for 2014 to decline 1% from the previous year.
Looking forward, Tyson expects domestic chicken production to increase 2-3% this year. The company projects an above-average year for the chicken segment, with an increase in grain supplies keeping feed costs low, and it foresees strong demand for chicken as the price of other proteins climbs.
Although there has been an adequate supply of beef in the regions close to Tyson's plants so far in 2014, the company predicts an "imbalance of supply and demand" for beef at some point in the remainder of the year.
In comparison to 2013, Tyson expects hog supplies to shrink 4-5%, albeit counterbalanced by higher liveweights.
For fiscal 2014, Tyson is forecasting company sales to reach $37 billion, with anticipated growth in value-added chicken sales, prepared food sales and international chicken production.