Tyson Foods Inc. (TSN), the world's largest meat processing company, said Monday that its second-quarter earnings declined 36 percent from last year, due in part to losses from the company's commodity risk management activities related to grain purchases.

Net income fell to $76 million, or 21 cents per share, in the three months ended April 2 from $119 million, or 33 cents per share, a year ago. Pretax earnings included $2 million of costs related to poultry and prepared foods plant closings in the latest quarter, compared with costs of $14 million, or 2 cents per share, last year.

Sales grew to $6.36 billion from $6.15 billion a year earlier, primarily due to increased average sales prices and improved product mix, partially offset by a decrease in sales volumes.

Analysts surveyed by Thomson Financial were looking for the company to post earnings of 17 cents per share on sales of $6.15 billion in the latest quarter.

Tyson on Monday also lowered the top end for its earnings projection for the year. The company now says its anticipated profits for 2005 are expected to be in the range of $1.05 to $1.20. It had forecast previously that it would earn up to $1.30 per share.

Analysts' consensus estimate was for earnings of $1.05 per share for the year.

Tyson Foods (search) shares gained 70 cents, or 4.1 percent, to $17.59 in early trading Monday on the New York Stock Exchange.

The company said performance in its chicken segment saw higher sales prices while grain costs decreased. Tyson's beef segment saw margins that improved late in the period. The company said sales were up across the board.

"Sales increased across all four of our primary operating segments during the second quarter. The chicken segment in particular delivered strong performance as a result of increased prices and lower grain costs," Tyson chairman and chief executive John Tyson (search) said.

John Tyson said beef supplies should improve and chicken demand should grow, setting up the company or a good second half of the fiscal year.

For the first six months of the year, Tyson said its earnings fell to $124 million, or 35 cents per share, compared to $176 million, or 49 cents a share, a year earlier. Revenue rose to $12.81 billion from $12.66 billion a year ago.