Tyson Foods Profit Down 7 Percent, Company Expects Record Year

by Arkansas Business Staff  on Monday, May. 7, 2018 10:12 am   2 min read

Tyson Foods Inc. of Springdale on Monday reported second-quarter net income attributable to Tyson of $315 million, down 7 percent from the $340 million it reported last year.

The publicly traded meat processor (NYSE: TSN) reported earning per share of 85 cents, down from 92 cents last year, missing analysts' estimates. Revenue was $9.8 billion, up from $9.1 billion. 

Despite what CEO Tom Hayes called "challenging conditions," the company reaffirmed its guidance for another record year.

"We are continuing to grow our business as we create a modern food company focused on protein,” Hayes said in a news release. "Sales, volume, adjusted operating income and adjusted EPS all increased in the fiscal second quarter vs. the same period last year. Up against challenging conditions, we delivered solid results in all four of our segments."

Tyson said sales volume increased in each of its operating segments except pork. The chicken and prepared foods segments benefited from the company's acquisition of AdvancePierre Foods Holdings Inc., which it completed last year.

In its earnings report, the company said the integration of AdvancePierre and a multi-year restructuring plan would continue to pay dividends in future quarters. The benefits from AdvancePierre and other cost cuts are expected to result in net savings of $200 million per fiscal year in 2018, 2019 and 2020. The bulk of the savings — focused on supply chain, procurement and overhead improvements — are expected in the chicken and prepared foods segments, the company said.

During the quarter, the company closed on the sale of its Kettle brand business for $125 million. It said it would use proceeds to pay down debt. The company expects to close on the sale of two other brands — Sara Lee Frozen Bakery and Van's — in the back half of the year.

The company said it expects fiscal 2018 sales to grow by about 6 percent to between $40 billion and $41 billion on incremental AdvancePierre sales of $1.1 billion, an increase in sales volume in its legacy businesses and an improvement in mix predominantly in its chicken segment. 

 

 

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