In a move that signals Tyson Foods Inc. believes its chicken business is again profitable, the world's largest meat maker has named a new CEO to replace interim head Leland Tollett, who had been tapped in January to help weather an industry downturn.
Donnie Smith, Tyson's senior group vice president of poultry and prepared foods, will take over for Tollett immediately, according to a statement from the company, which is based in Springdale, Ark.
In January, Tollett returned to the company he led from 1991 to 1998 to see the chicken business through a slump involving record high prices for key ingredients like corn and weak restaurant demand that hurt prices it could charge. The downturn was far-reaching and even caused Tyson's top chicken competitor, Pilgrim's Pride Inc., to seek bankruptcy protection.
It was unclear at the time how long Tollett would stay on, and he said in a statement Thursday he wondered if it would be three months or three years.
"That time is now, and our company has been profitable for an extended period of time," said Tollett, who is 72.
Tollett, who had also been interim president since January, will assist the 50-year-old Smith during the transition period, though he said in a statement he expects to significantly cut back on the time he spends on company matters.
Tollett first joined the company in 1959. When he was named interim CEO to replace Dick Bond, Tyson said its board of directors would focus on internal candidates as a permanent replacement.
Smith has been with Tyson since 1980 and has worked in areas such as purchasing, food safety, and logistics.
Also on Thursday, Tyson promoted Jim Lochner, 57, to chief operating officer. Lochner currently serves as senior group vice president of fresh meats.
Replacements for Lochner and Smith will be named in the next two weeks.
The announcement comes just days before Tyson is slated to release its fourth quarter earnings on Monday.
The company posted a strong third-quarter profit in August that beat estimates. Tyson said at the time chicken prices were improving.
Shares of Tyson slipped 2 cents to close at $13.07 Thursday.
KeyBanc Capital Markets analyst Akshay Jagdale said the appointments of Smith and Lochner were not a surprise, because the chicken segment is so important to Tyson's performance. The announcement is directly linked to the turnaround in the chicken segment, he wrote to clients, adding he expected it to be profitable in the fourth quarter.
"This announcement removes a source of uncertainity, in our view, but we believe what is most important for the stock is how Tyson's chicken segment performs over the next six to 12 months," he wrote to clients.
AP Business Writer Michelle Chapman contributed to this report from New York.