Tyson Foods' 3Q Profit Beats Expectations

by Arkansas Business Staff  on Monday, Aug. 6, 2018 10:53 am   2 min read

Tyson Foods Inc. of Springdale on Monday reported fiscal third-quarter profit of $541 million, up from $447 million in the same quarter last year and well ahead of analysts' expectations.

The publicly traded meat processor (NYSE: TSN), which last week lowered its fiscal 2018 outlook, reported net income of $1.47 per share. Earnings, adjusted for restructuring costs, were $1.50 per share.

The results beat Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $1.33 per share. Shares of the company traded up more than 3 percent on Monday.

Revenue was $10.05 billion in the period, up from $9.85 billion, but short of analysts' forecasts of about $10.24 billion.

"We continued to grow our business in Q3, even with the headwinds we faced related to oversupply and pricing," Tom Hayes, Tyson Foods president and CEO, said. "In this challenging environment, we delivered a solid quarter overall, growing earnings, operating income and margins.

"Our diverse portfolio continues to be a key advantage for us. Our Beef and Prepared Foods segments had a strong quarter, helping to balance the results in our Chicken and Pork segments, which faced stiff headwinds."

Tyson Foods reported record operating income in its Beef segment — $318 million, up from $147 million in the same quarter last year. Meanwhile, the company's Pork and Chicken segment saw operating income declines. Chicken was $189 million, down from $294 million; Pork was $67 million, down from $136 million.

The company expects full-year earnings in the range of $5.70 to $6 per share, with revenue in the range of $40 billion to $41 billion. A week ago, the company citing "uncertainty in trade policies and increased tariffs negatively impacting" chicken and pork prices, revised its 2018 adjusted earnings downward, from previous guidance of between $6.55 to $6.70.

"The combination of changing global trade policies here and abroad, and the uncertainty of any resolution, have created a challenging market environment of increased volatility, lower prices and oversupply of protein," Hayes said last week in a statement about the downgrade. "We will continue to watch these conditions carefully."

During a conference call with reporters on Monday, Hayes said uncertainty over the trade skirmishes "creates nervousness" and "it's all up in the air at this point" regarding tariffs. He emphasized the importance of innovation, saying that companies that don't innovate get left behind.

(With reporting by Sarah Campbell-Miller and contributions from The Associated Press.)



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