UPDATE 3-Tyson loss smaller than expected, shares jump

* Adjusted loss of 5 cts per shr beats St view loss 6 cts

* Chicken segment profitable since end of February

* Beef, pork, chicken, prepared foods currently profitable

* Shares up 9 percent (Recasts, adds company and analyst comments, details, updates stock)

By Bob Burgdorfer

CHICAGO, May 4 (Reuters) - Tyson Foods Inc (TSN.N) posted a larger quarterly loss on Monday, pressured by weak sales and an income tax expense, but its shares rose 9 percent as the world's largest meat company said all of its units are now profitable.

On an adjusted basis, the loss beat analysts' expectations by a penny.

Tyson produces beef, pork and chicken and has a prepared foods unit. While the pork unit has not yet been hurt by flu-related export bans, consumer reactions to the flu did hurt pork sales in the United States and Mexico, the company said.

Initially called swine flu by the World Health Organization, consumers shied away from pork and some countries banned meat from several U.S. states.

"We will have to see if Mexico's consumption of hams comes back up and that was where the major price pressure was," Jim Lochner, senior vice president of fresh meats, said during a conference call.

"We have seen weaker demand domestically as well over this confusion," he said. "That is throwing a wild card into this Q3 and Q3 is usually our challenging quarter."

Even before the H1N1 outbreak Tyson, like other meat companies, was hurt by a drop in sales to restaurant and food service customers as the recession has consumers eating out less and favoring lower-cost meats or other foods.

To cope, Tyson has closed or sold plants, cut costs, reduced production, and secured additional financing.

The Springdale, Arkansas-based company reported a loss of $104 million, or 28 cents per share, for the second quarter that ended March 28, compared with a loss of $5 million, or 2 cents per share, a year earlier.

During the quarter Tyson went to a year-to-date income tax estimating method from an annual method, resulting in an increased tax expense of $62 million, or 17 cents per share.

The results also included charges of $15 million, or 2 cents per share, for a plant closing.

On an adjusted basis, Tyson lost 5 cents per share, compared with analysts' average forecast for a loss of 6 cents per share, according to Reuters Estimates.

Revenue fell to $6.31 billion from $6.34 billion,

Results were relatively in line with expectations.

S&P Equity Research on Monday raised its rating on Tyson to a "buy" from "hold."

Chicken and pork segment results came in worse than expected, while beef was better and prepared foods was in line with projections, said Barclays Capital analyst Christopher Bledsoe.

Tyson raises the chickens it processes into meat, but buys the cattle and hogs for its beef and pork businesses.

On an operating basis, the chicken unit had a $46 million loss, compared with a year-ago $45 million loss. Higher feed costs contributed to the loss.

While Tyson's chicken segment posted an operating loss for the quarter, it has been profitable since the end of February, interim Chief Executive Leland Tollett said in a statement.

The beef unit, also the nation's largest, posted a $28 million profit, up from $6 million a year ago, helped by lower live cattle prices.

Profit in the pork segment fell to $29 million from $69 million, due to higher hog prices and reduced sales volume.

Smaller cattle and hog supplies this year will likely mean Tyson will have to pay more for those animals, said D.A. Davidson analyst Tim Ramey.

Shares of Tyson rose 9.3 percent to $11.54 on the New York Stock Exchange. Shares Smithfield Foods Inc (SFD.N), the largest U.S. pork producer, soared 8.8 percent to $9.37. (Reporting by Bob Burgdorfer, editing by Dave Zimmerman)