<div id="subtitle">Tyson Foods returns to 1st-qtr profit as all its units, including chicken, make money</div><div><p>Tyson Foods Inc. returned to a profit in its fiscal first quarter as conditions in the meat industry eased, the company said Friday, and the news sent its shares soaring to a 52-week high.</p><p>The company's chicken segment, hit by oversupply and consumers' spending cuts, continued the improvement it began two quarters earlier. Tyson's beef and pork units also made money.</p><p>"We see broad-based improvement, with chicken and beef segments looking especially good," Standard and Poor's analyst Tom Graves wrote to clients.</p><p>Graves said Tyson is positioned well to benefit as the economy improves, and he raised his target price for its shares by $4 to $18. He maintained a "hold" rating.</p><p>In the three months that ended Jan. 2, the company earned $160 million, or 42 cents per share. For the same period a year earlier, it reported a loss of $102 million, or 27 cents per share. Its sales rose slightly to $6.63 billion.</p><p>The performance handily beat the average expectation of analysts surveyed by Thomson Reuters for a profit of 18 cents per share on revenue of $6.58 billion.</p><p>Tyson CEO Donnie Smith told investors on a conference call that sales to restaurants remain weak but are improving.</p><p>"Consumers are still worried about the economy and unemployment, although our research indicates they're starting to feel a little better about their economic situation and aren't hardly as concerned about limiting their restaurant visits," said Smith, who led his first call as CEO of the Springdale, Ark., company.</p><p>When consumers limited restaurant visits during the recession, that dragged down demand in Tyson's food service unit, which serves restaurants. People seem now to be starting to eat out again, executives said.</p><p>"Food service demand is forecast to be down again this year but with a smaller decline than last year, so we're hoping we're seeing the light at the end of the tunnel," Smith said.</p><p>Tyson shares rose 76 cents, or 5.4 percent, to $14.75 on Friday, when trading was three times its normal volume. They also touched a new 52-week high of $15.25.</p><p>The company reported a third straight quarterly profit in its chicken unit. More than a year after a glut in supply and a consumer spending slowdown hit the industry, the company said it is benefiting from cutting production and from falling commodity costs.</p><p>Tyson said its chicken prices were up 2.8 percent compared with a year earlier, and it expects demand for chicken to rise later in the year. International acquisitions boosted Tyson's chicken revenue 5.6 percent.</p><p>Its beef and pork prices fell more than 6 percent, however. Those two meats are pricier than chicken, and demand for them has fallen in the recession. Prices in Tyson's smallest unit, prepared foods, fell nearly 6 percent.</p><p>Tyson expects to be able to raise its prices further as it uses up its inventories and grain costs continue falling. In the first quarter, its grain costs fell $84 million.</p><p>Duties of up to 105.4 percent announced Friday in China on imports of U.S. chicken products could weaken Tyson's business there. Smith said Tyson is "still assessing" the issue.</p><p>The USA Poultry & Egg Export Council said it hopes Chinese officials will see that U.S. chicken producers did not charge more abroad than in their home markets for chicken products, a practice known as "dumping" that the new taxes are meant to fight.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=68530367&bid=informcom" /></div><div id="copyright"><div>

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