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Tyson Foods Reports Increased Earning Despite Difficult Market

Tyson Foods Reports Increased Earning Despite Difficult Market

Monday, August 6th, 2018

A trying meat market, instability resulting from escalating trade tensions, and problems of oversupply continued to plague Tyson Foods this quarter—but the maker of Jimmy Dean, Hillshire Farm, and Ball Park brand product is weathering those conditions with aplomb. After lowering its expected earnings late last month, the protein provider reported solid third quarter earnings this week—including strong showings from the company’s beef and prepared foods segments.

Tom Hayes, President and Chief Executive Officer, Tyson Foods“We continued to grow our business in Q3, even with the headwinds we faced related to oversupply and pricing,” said Tom Hayes, President and Chief Executive Officer, in a statement. “In this challenging environment, we delivered a solid quarter overall, growing earnings, operating income, and margins.”

Highlights from the company’s third quarter include:

  • GAAP EPS of $1.47, up 21% from last year; Adjusted EPS of $1.50, up 17% from last year
  • GAAP operating income of $802 million, up 15% from last year; Record third quarter Adjusted operating income of $816 million, up 8% from last year
  • Total Company GAAP operating margin of 8.0%; Adjusted operating margin of 8.1%
  • Record Beef segment operating income of $318 million
  • Realized $66 million of Financial Fitness Program cost savings

The company noted that, despite sluggish sales from chicken and pork segments, Tyson’s well-rounded family of operations continued to buoy the company’s overall results.

Tyson's diverse portfolio continues to be a key advantage for the company

“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,” added Hayes. “We have a sound strategy and a solid foundation, which will continue to serve our business and shareholders well. We remain confident in our ability to create long-term value.”

The company noted its continuing work to narrow its “strategic focus on protein brands,” including the sale of many of prepared food assets under the Sara Lee®, Kettle, and Van’s® brand, and predicted significant synergies from the integration of AdvancePierre to continue to benefit the company throughout 2018. Tyson also noted tax savings under the terms of the Tax Cuts and Jobs Act, signed into law late last year.

The protein provider reported solid third quarter earnings this week

Despite solid growth, MarketWatch reported that the company fell short of analysts’ expectations. The company further adjusted its expectation for the fiscal year, and Tyson now expects to earn between $5.70 a share and $6 a share on an adjusted basis, down from its previous guidance of between $6.55 a share and $6.70 a share.

To read the company's earnings report in its entirety, click here.

For more on all things dairy, deli, bakery, and specialty food, keep reading Deli Market News.

Tyson Foods

In This Story

Tyson Foods, Inc., founded in 1935, is one of the world's largest producers of chicken, beef, pork, and prepared foods.

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