* Lower feed costs should lift chicken
* Beef profit may be higher, pork down
* Recession, H1N1 bans may have hurt sales
CHICAGO, July 30 Chicken may be the tastiest item on Tyson Foods Inc's (TSN.N) quarterly results menu next week, as the company should report a larger profit versus a year ago even as the recession and export bans due to the H1N1 flu have hobbled meat sales.
The world's largest meat company is scheduled to report third-quarter results on Monday.
Tyson produces beef, pork, and chicken. Its chicken unit, the nation's largest, has hurt earnings for nearly a year due to high feed costs and weak demand for the meat.
Tyson and other chicken companies responded by cutting production, and the results of that effort should be evident in the earnings report. These companies also have been helped by a sharp drop in feed prices, particularly corn.
"The primary reason for the strong earnings is our anticipation of excellent results in the poultry business as the company's higher cost grain largely ran through the P&L in the second quarter and chicken pricing improved significantly in the third quarter," Stephens Inc analyst Farha Aslam said in a research report.
Tyson produces the chickens it processes into meat, but buys the cattle and hogs for its beef and pork operations.
Wall Street analysts on average expect Tyson to report earnings of about $74 million, or 22 cents per share, for the quarter that ended June 27, compared with $9 million or 3 cents a share a year earlier, according to Reuters Estimates.
Excluding one-time items, Wall Street expects earnings of $75.56 million or 20 cents a share.
A third-quarter profit would be the first for this fiscal year for Tyson, which, like other meat companies, has been hurt by slow sales of all meat due to the global recession.
The weak economy has had consumers eating less at restaurants, a trend that has slowed sales of such things as beef steaks, pork chops and chicken breasts. Also, at-home dining has featured lower-cost foods such as hot dogs, lunch meats and pasta.
Tyson's beef unit, the nation's largest, should post better results versus a year ago largely because in 2008 there were losses due to cattle hedging and forward beef sales.
Pork earnings should be down from a year ago, hurt by too much supply and weak demand.
The outbreak of H1N1 flu, commonly called swine flu, this spring prompted some countries to ban pork from several U.S. states even though the disease is not spread by hogs or pork.
"Beef margins have been adequate, but they are not rolling in money," Doug Harper, an analyst at Brock Associates, said of that industry. "The pork complex has really been hurting. It has been a combination of too much supply and not enough demand."
On Monday, analysts will be alert for comments from Tyson regarding the recession and swine flu as well as the company's outlook for meat supplies and operating margins.
Pork producers have reduced production, but supplies remain burdensome.
"We are having difficulty selling as much pork as we are producing. We have too much pork to get the prices we need," Glenn Grimes, an economist at the University of Missouri, said last week.
Tyson said this month that poor economics will have it reducing its hog breeding herd by 28 percent.
Smithfield Foods Inc SFD.N, the nation's largest hog producer, reduced its breeding herd by 10 percent and in June announced an additional 3 percent reduction. (Reporting by Bob Burgdorfer, editing by Matthew Lewis)