Hillshire deal helps Tyson Foods beat profit estimates

Reuters- Tyson Food Inc, the biggest U.S. meat processor, posted a better-than-expected quarterly profit, helped by its acquisition of Jimmy Dean sausage maker Hillshire Brands Co last year.

Shares of the company, which also reiterated its earnings forecast for the full year, rose 1.2 percent in premarket trading on Monday.

Sales in the prepared foods business, under which Tyson primarily sells bacon, pepperoni and sausages, more than doubled to $1.88 billion, overshadowing a decline in chicken sales.

The U.S. poultry industry is grappling with the biggest bird-flu outbreak since the 1980s.

Flu cases have been confirmed in 14 states and more than 21 million chickens and turkeys have either killed by the disease or expected to be culled to curb the spread of the virus, according to federal and state regulators.

Tyson, which bought Hillshire to expand its prepared foods business, said it expects to achieve more than $250 million in savings this year, up from the more than $225 million it had forecast previously.

The company said it realized $77 million in total savings during the second quarter as a result of the Hillshire deal.

Tyson maintained its 2015 earnings forecast of $3.30-3.40 per share.

Revenue rose 10.5 percent to $9.98 billion in the second quarter ended March 28.

Net income attributable to Tyson Foods rose to $310 million, or 75 cents per share, from $213 million, or 60 cents per share, a year earlier.

Excluding items, the company earned 75 cents per share.

Analysts on average had expected earnings of 72 cents per share and revenue of $10.11 billion, according to Thomson Reuters I/B/E/S.

Tyson's shares trading at $41 before the bell on Monday.

(Reporting by Lisa Baertlein in Los Angeles, PJ Huffstutter in Chicago and Yashaswini Swamynathan in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty)