Tyson Foods Posts Record Quarterly Sales

Tyson Foods Inc. of Springdale on Monday reported a 47 percent decline in quarterly net income on record sales of $10.1 billion as the meat processor continues to integrate the biggest acquisition of its history, Hillshire Brands Inc. of Chicago.

Tyson reported fourth-quarter net income attributable to the company of $137 million or 35 cents per share, down from $261 million or 70 cents in the same quarter last year.

But on an adjusted basis, Tyson reported quarterly operating income of $469 million, up 13 percent from the same time last year, and income per share attributable to Tyson of 87 cents, up 24 percent from the same time last year and above analysts’ expectations of 76 cents.

For the fiscal year, Tyson reported net income attributable to the company of $864 million, up 11 percent from the previous year, and earnings per share of $2.37, up from $2.12 in the previous year.

Fiscal year sales were $37.6 billion, up 9 percent from the previous year.

In a news release announcing the company’s earnings, Tyson Foods’ CEO Donnie Smith focused on the company’s continued integration of Hillshire, and noted that this marked the company’s second consecutive year of record sales and earnings.

“This is an exciting time as we integrate Hillshire Brands and Tyson Foods, and I believe that when we look back on this merger years from now, we’ll see it as a watershed event,” Smith said. “We’re setting higher expectations and anticipating more growth and increased profitability, specifically in the Chicken and Prepared Foods segments.” 

The addition of Hillshire had an immediate effect on the company’s Prepared Foods segment, with sales up nearly 43 percent to $1.2 billion during the fourth quarter. Still, operating income for the segment fell on several factors, including higher costs associated with Tyson’s pre-Hillshire prepared foods business, an improvement plan for the segment and post-closing results tied to the Hillshire purchase.

In the company’s beef segment, sales rose nearly 19 percent to $4.4 billion. But sales volume declined, and operating income fell due to higher fed cattle costs and “periods of reduced consumption of beef products.”