UPDATE 3-Tyson Foods projects record profits, shares hit high
(Adds CEO and analyst comments, paragraphs 3-9)
By Tom Polansek
Aug 8 (Reuters) - Tyson Foods Inc said it expected record profits this year and next as its focus on higher-margin packaged products pays off, after low feed and livestock costs helped quarterly earnings smash analysts' estimates on Monday.
Shares of the biggest U.S. meat processor and maker of Ball Park brand hot dogs set an all-time high of $75.46 before paring gains.
The company has benefited as costs for commodities, including cattle, hogs and grains fed to livestock, have fallen due to increased supplies. On a conference call, Tyson Foods Chief Executive Officer Donnie Smith projected feed prices would stay low next year.
"Tyson is firing on all cylinders right now," JP Morgan analyst Ken Goldman said in a note. With corn prices down, "we think the lights will stay on at the party for some time."
Food companies, including Tyson and rivals such as Hormel Foods Corp, are adjusting their product lines as consumers are increasingly buying fresher items and those perceived to be healthier, turning away from processed foods.
Tyson said it may expand into organic chicken in a challenge to privately held Perdue Farms, which says it is the largest U.S. organic-certified chicken producer. This month, it plans to launch a line of frozen chicken products from birds that have never received antibiotics.
Tyson has benefited by shifting its strategy toward selling such "value-added" products, which command higher margins than commodity meats. But some analysts questioned how long the company can differentiate itself in a category that includes pre-diced pork and frozen, individually packaged steaks. Continuación...