Tyson Profit Up Despite Mad Cow

Tyson Foods Inc., the No. 1 U.S. meat company, Monday posted higher quarterly earnings even as it took a $61-million charge for shipments of beef canceled after the first U.S. case of mad cow disease. Shares rallied 11% on relief that the effect was not more severe.

The first U.S. case of mad cow disease was reported Dec. 23, which was late in Tyson’s fiscal first quarter. The company said it was hurt by the announcement but added that domestic demand for beef remained strong.

Analysts had expected the company to be somewhat harmed by the disclosure that a Holstein dairy cow in Washington state had contracted the deadly brain-wasting disease.

The company warned Monday that it might have to record as much as $30 million in additional charges for mad cow.

Tyson Chief Administrative Officer Greg Lee said the company was assuming that the Japanese and Korean export markets would reopen within three to six months. It hopes to resume exports to Mexico within six to eight weeks, if not sooner.

Springdale, Ark.-based Tyson said profit for the fiscal first quarter ended Dec. 27 rose 46% to $57 million, or 16 cents a share, from $39 million, or 11 cents, a year earlier.

Tyson’s earnings included charges of 5 cents a share for plant closings and 11 cents a share for costs related to mad cow disease. Excluding the charges, Tyson’s earnings of 32 cents a share came in above Wall Street analysts’ average estimate of 26 cents a share, according to Reuters.

Sales rose 12% to $6.5 billion, helped by higher prices for beef, chicken and pork.

Tyson shares rose $1.49 to $14.99 on the New York Stock Exchange, where it was the fourth-biggest gainer in percentage terms.