http://www.morningstar.com/earnings/19312441-tyson-foods-inc-class-a-tsn-q4-2010.aspx

Tyson Foods Inc Class A TSN
Q4 2010 Earnings Call Transcript

Transcript Call Date 11/22/2010

Operator: Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

And now, I'd like to introduce Ruth Ann Wisener. Thank you. You may begin.

Ruth Ann Wisener - VP, IR and Assistant Secretary: Good morning and thank you for joining us for Tyson Foods Conference Call for the Fourth Quarter and 2010 Fiscal Year.

I need to remind you that some of the things we talk about today will include forward-looking statements. Those statements are based on our view of the world as we know it now, which could change. I encourage you to look at our press release for a discussion of the risks that can affect our business.

On today's call is Donnie Smith, President, and Chief Executive Officer; Jim Lochner, Chief Operating Officer; and Dennis Leatherby, Chief Financial Officer. To ensure we get to as many of your questions as possible, please limit yourself to only one question and then get back in the queue for additional questions.

I'll now turn the call over to Donnie Smith.

Donnie Smith - President and CEO: Thanks, Ruth Ann. Good morning, everyone and thanks for joining us. Well, I hope you've had a chance to review our press release to see that we had a record fourth quarter with GAAP earnings of $0.57 a share or $0.64 a share on an adjusted basis.

We produced net sales of $7.4 billion and operating cash flows of $350 million for the quarter. Our Q4 adjusted operating margin was 5.6%. Our net sales of $28.4 billion for the year, we produced record GAAP earnings of $2.06 or $2.19 a share on an adjusted basis, and all of our operating segments we're in or above their normalized ranges.

These results generated significant cash, which we used to reduce debt and reinvest in our business. These results also demonstrate the strength of our diversified protein model. Beef and pork produced close to $1 million in operating income for the year. The Chicken segment improved significantly and was within its normalized range.

Market conditions were favorable versus '09, but they were far from ideal. The economy has been slow to recover, foodservice demand was off again, consumer confidence was low, cattle and hog costs climbed throughout the year. (Cash), corn and soymeal prices averaged about $0.40 a bushel and $30 a ton cheaper for the year respectively, but of course we were out in Russian market for most of the year and lower leg quarter prices offset some of the benefit from feed ingredients. Overall, the domestic availability of protein was lower than in '09 which was favorable. But in the end, our diversified protein model and most importantly our improved execution made for a very strong performance in 2010, despite the headwinds.

Before I move on, I'd like to quickly remind you of our four objectives; be our customers go to supplier, be the best-in-class protein manufacturer, build a multi-protein enterprise and upgrade our raw materials and byproducts which is of course a reference to our renewable product business.

Success in serving our customers was demonstrated by several Supplier of the Year awards we received from some of our most valued customers, and we will continue earning their business through innovation service.

Read our Earnings Call Transcript disclaimer.
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