Cuts Reported as Earnings

Tyson Food 3Q Earnings Growth Explained

In this time of recession many companies have taken the intelligent move to cut costs. However, the major cost that is cut is labor. While this is great for stockholders and the bottom line, it only spells disaster for the country.

Financial news media reports earnings as going up, however they lack the wherewithal to accurately portray how the earnings were achieved, i.e. cuts.

For instance Tyson Foods achieved a 3rd quarter profit jump. They earned $134 million, or 35 cents per share, compared to $9 million or 3 cents per share a year earlier.

The company closed some operations, cleared excess inventory and put in place other cuts. Sales actually dropped by 3% to $6.66 billion from $6.85 billion on declines in beef and pork sales, while chicken sales improved, due to higher pricing.

Formerly, Tyson Foods would allow contracts to be made to lock in long term low prices, however when grain prices spiked last year they took losses, since they could not adjust prices accordingly.

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