Sales for the first quarter of fiscal years 2007 and 2006 were $6.6 billion and $6.5 billion, respectively. Operating income was $145 million compared to $110 million and net income was $57 million compared to $39 million for the first quarter of fiscal 2007 and for the same period last year, respectively.

Selling, general and administrative expenses decreased $44 million as compared to the same period last year. The decrease is primarily due to the Company's Cost Management Initiative.

"Our immediate goal was to return to profitability, and I am pleased to say we have accomplished our objective, and through the efforts and sacrifices of our Team Members, we delivered our strongest quarter in 15 months," said Richard L. Bond, president and chief executive officer. "We have put the $200 million Cost Management Initiative into action while driving innovation and growth with our customers. As a result of our profitability and cash flow improvements, our debt is now below $3 billion.

"All of our segments showed substantial improvement over the fourth quarter of fiscal 2006," Bond said. "Chicken was profitable, and both Pork and Prepared Foods delivered margins in normalized ranges. Although not yet profitable, Beef showed meaningful improvement.

"While we still anticipate the second quarter to be challenging, we expect it to be profitable," Bond said. "We remain on track to meet our earnings guidance for the year, but emphasize the dramatic rise in corn prices has become a major issue for us and others in the food industry. Companies will be forced to pass along rising costs to their customers, meaning consumers will pay significantly more for food. If left unaddressed, the bigger long-term issue will be the availability of U.S. and global grain for protein and other foods. We fully support efforts toward renewable energy; however, as the food versus fuel debate unfolds, we must carefully consider the negative and unintended consequences of over-using grains."

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