Tyson Foods' 4Q Profit Beats Expectations, But Revenue Misses

Tyson Foods' 4Q Profit Beats Expectations, But Revenue Misses
(Tyson Foods)

Record beef income helped push Tyson Foods Inc. of Springdale to fiscal fourth-quarter profit that beat analysts' expectations, but revenue for the publicly traded meat processor fell short.

The company (NYSE: TSN) reported Tuesday quarterly profit of $537 million, or $1.47 per share. Earnings, adjusted for asset impairment costs and restructuring costs, came to $1.58 per share. Three analysts surveyed by Zacks Investment Research called for earnings of $1.33 per share.

Quarterly revenue was about $10 billion, short of the $10.15 billion that analysts expected.

"Tyson Foods produced solid earnings in fiscal 2018, demonstrating the strength of our differentiated portfolio and diversified business model," President and CEO Noel White said in a news release. "We exceeded our revised guidance due to a strong finish in the fourth quarter in the Beef and Pork segments. Prepared Foods drove margin expansion, while the Chicken segment closed the gap from earlier in the year with increased promotional activity."

For the year, the company reported profit of $3.02 billion, or $8.19 per share. Revenue was at $40.05 billion. The company said it expects full-year 2019 earnings in the range of $5.75 to $6.10 per share. It expects sales of $41 billion.

Shares of Tyson Foods fell Tuesday morning by more than 6 percent as analysts reacted to the revenue miss and what some considered soft outlook on fiscal 2019. Shares of the company have fallen 24 percent since the beginning of the year; the Standard & Poor's 500 index has increased 2 percent. The stock has decreased 17 percent in the last 12 months.

The company said it saw a sales boost for beef amid improved availability of cattle supply and increased exports. But the average sales price dropped in the fourth quarter amid increased availability of live cattle supply and lower livestock costs. The company said it was able to grow operating income even with increased labor and freight costs and one-time bonus to frontline employees of $27 million earlier in the year.

Pork sales declined as the company tried to balance supply with demand. Poultry sales increased "primarily due to incremental volume from business acquisitions." Prepared foods sales grew as well.

(The Associated Press contributed to this report.)