LITTLE ROCK—Moody’s Investors Service downgraded Tyson Foods Inc. on Thursday on concerns that the company’s chicken business will lose more money and that its acquisition strategy will limit its available cash.

Moody’s cut Tyson to Ba3 from Ba1 and said its outlook for the Springdale, Ark.-based company was negative.

The ratings agency cited Tyson’s losses in its chicken business—$91 million in the fourth quarter—and the company’s statement that it expects a significant loss in chicken in its 2009 first quarter—and possibly an overall loss for the quarter.

Tyson also pledged to continue with its international expansion program.

The company’s chicken business had a profit of $315 million a year earlier, but surging grain and fuel prices combined with oversupply problems put the segment into the red in 2008.

Moody’s noted “robust growth” in profits in Tyson’s beef and pork segments, but said the company’s overall profit came to only 1.45 percent of revenues. Even though grain prices have fallen, Moody’s said, it does not expect chicken margins to improve in the short term because market prices are too low.

The ratings agency also lowered Tyson’s speculative grade liquidity rating, saying that is due to problems that will make it hard for the company to have “stable and solid operating cash flow in the chicken segment in the short run.” It also cited the likelihood that until consolidated margins rebound, that capital beyond what Tyson has to have as part of its loan terms “would not be abundant.”

Tyson has unencumbered assets that it could sell to raise cash if needed. But Moody’s said some of the company’s assets have been pledged to back up some of its debt.

Tyson shares rose 33 cents, or 6.9 percent, to close at $5.13—well below their 52-week high of $19.50. Earlier in the session, they slid to $4.50, their lowest point since 1988.

Tyson said Monday that it earned $48 million, or 13 cents per share, up from $32 million, or 9 cents per share, a year ago. Sales rose to $7.20 billion from $6.66 billion.

The company says its future lies in international growth, and is investing in Brazil, China and India.