Tyson Foods Inc. of Springdale (NYSE: TSN) on Monday raised its sales outlook for the fiscal year on the strength of its chicken and prepared foods segments, even as total profits declined sharply.
The company said it was expecting total sales to increase between 2% and 3% for fiscal 2025, up from its estimate of flat sales to a 1% increase.
Third-quarter revenue was $13.9 billion, up nearly 3% from $13.5 billion in the same quarter a year ago.
Income for the quarter was $61 million, down 68.1% from $191 million, while earnings per share was 17 cents, down from 54 cents.
The results exceeded Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 72 cents per share.
Shares of the company rose about 4% to $54.62 on Monday morning. Over the past 12 months, shares were down more than 12%,
“Our third quarter results demonstrate the strength of our multi-protein, multi-channel portfolio and our relentless focus on operational excellence,” Tyson Foods CEO Donnie King said. “Delivering our fifth consecutive quarter of year-over-year growth across sales, adjusted operating income and adjusted earnings per share underscores the resilience of our business model. Looking ahead, we are confident in our ability to meet consumer needs, capitalize on protein demand and deliver long-term value to our shareholders.”
Segment Results
The chicken segment reported sales of $4.2 billion, up from $4.1 billion. Operating income was $367 million, up 50.4% from $244 million.
The prepared foods segment reported sales of $2.5 billion, up from $2.4 billion. Operating income was $302 million, up 48.8% from $203 million.
The pork segment reported sales of $1.5 billion, up from $1.46 billion. Operating income was $36 million, up from a loss of $62 million.
The international segment reported sales of $557 million, down from $582 million. Operating income was $49 million, nearly double the segment’s $25 million profit a year ago.
Beef Struggles
Tyson Foods’ beef segment reported a third-quarter loss of $494 million, wider than the loss of $69 million it posted a year ago.
The company said it recorded a goodwill impairment charge of $343 million in beef.
Sales totaled $5.6 billion, up from $5.2 billion.
Beef prices have climbed as the U.S. cattle herd has fallen to the lowest count since 1951, the Associated Press reported. Factors including drought and cattle prices have prompted ranchers to downsize their herds.
The emergence of a pesky parasite in Mexico and the prospect of widespread tariffs may further reduce supply and raise prices.
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