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Tyson Foods Stock Jumps on Record 1Q Earnings

2 min read

Tyson Foods Inc. on Friday reported first quarter 2016 income of $461 million, nearly half again better than the same period in 2015.

The company’s stock price (NYSE:TSN) jumped on the news by more than 10 percent from Thursday’s closing price of $51.95.

Net income per share for the first quarter of 2016 was $1.15 compared to 74 cents for 2015.

“Fiscal 2016 is off to a very strong start in what we expect to be another record year,” Donnie Smith, president and CEO of Tyson Foods said in a news release. “Solid execution across the entire team resulted in record earnings, record operating income, record margins and record cash flows. We captured $121 million in total synergies for the quarter, with $61 million incremental to fiscal first quarter 2015.”

Tyson reported increases in operating income in each of its segments – chicken, beef pork and prepared foods -for the first quarter.

The company reported record operating income up 38 percent to $776 million compared to first quarter 2015 adjusted results. Adjusted operating income was up more than 37 percent from $564 million in the first quarter of 2015 to $776 million for first quarter 2016.

On Feb. 4, the board of directors approved an increase of 50 million shares authorized for repurchase. In the first quarter, the company repurchased 6.4 million shares for $300 million, excluding shares repurchased to offset dilution from its equity compensation plan.

“Due to our strong results in the first quarter and our positive outlook on the rest of the year, we are raising our fiscal 2016 earnings guidance to $3.85 – $3.95 per share,” Smith said. “We have a consumer-relevant portfolio packed with advantaged brands in advantaged categories, we have a superior supply chain, and we have a high-performing team focused on execution. I’m really excited about what’s ahead.”

The company reported a record total company operating margin of 8.5 percent as well as a record chicken segment operating margin at 13.6 percent, record prepared foods segment operating margin at 10.9 percent and pork segment operating margin at 13 percent.

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