Tyson Foods Inc. (TSN), hurt by costs associated with mad cow disease (search), reported lower profits Monday for its first quarter.

Tyson earned $48 million, or 14 cents per share, for the three months ending Jan. 1. That's compared to 16 cents per share in the period a year ago when the world's largest meat company earned $57 million, or 16 cents per share.

No case of bovine spongiform encephalopathy (search) has been attributed to Tyson, but the company has seen its beef business affected all the same. Tyson said Monday it took charges of $61 million related to the disease, plus charges of $25 million for poultry plant closings and costs related to prepared foods. The charges cost the company 16 cents per share, but other events added 3 cents per share.

Analysts surveyed by Thomson First Call had forecast that Tyson would earn 25 cents per share for the quarter.

Tyson reported sales for the quarter of $6.5 billion, flat compared to a year ago.

Low pork prices also pressured earnings, but Tyson said it had a good quarter in its poultry division.

"The first quarter was extremely difficult for us this year," Tyson chairman and chief executive John Tyson said. "Nevertheless, our chicken business continued to perform well, our cash flow from operations was strong, and we reduced our debt by $292 million. At the same time, continued market restrictions for beef, as well as a lack of live cattle supplies, and a tougher pricing environment for pork combined to impact our earnings."

Tyson executives told investors in a conference call Monday that the company's fundamentals are solid, and that it will continue to pay down debt and invest in automation and research and development.

The company said Monday it projects its 2005 earnings to be between $1.05 and $1.30 per share. The Thomson First Call estimate is $1.28 for the year.

Tyson shares fell 69 cents, nearly 4 percent, to $17.06 on the New York Stock Exchange (search).

For its outlook, Tyson president and chief operating officer Dick Bond said the guidance is based on the Canadian border being opened to cattle on March 7. He said that would allow cattle ready for slaughter and feeder cattle into U.S. markets.

Japan's border could open to U.S. beef late in the year, but won't result in enough sales to effect the company's bottom line.

"We are not factoring a whole lot of help from international markets for the balance of this fiscal year," Bond said.

John Tyson said the company will have to overtake competitors when Japan again allows U.S. beef.

"Other countries have done a good job of stepping in and filling the pipeline. We will have to spend some time and effort getting that supply chain back," John Tyson said.

He said the company expects to see its bottom line improve in the second half of the year.

The company said it added to its first-quarter profits with $12 million received from vitamin antitrust litigation. The company recorded a gain of $8 million from its sale of the last of Tyson's interest in Specialty Brands Inc. and $3 million of costs related to a prepared foods plant closing. The company said the combined effect was to add 3 cents per share to earnings.