Tyson Foods To Mete Out Q4 Results

23-Nov-2015 - USA

Meat products maker Tyson Foods Inc. (TSN) is slated to release its fourth-quarter numbers before the bell on Monday, November 23rd, with analysts polled by Thomson Reuters projecting earnings of $0.88 per share on revenue of $10.35 billion.

Continues To Focus On Long-Term Growth & Brand Building

The company expects its retail margins to moderate a bit in the fourth quarter as it spends against the national launches of Hillshire Snacking and Ball Park jerky, as well as increased MAP spending behind innovation and the base business. Also, the company anticipates impact from price reductions in some product lines to respond to commodity declines, particularly in pork raw materials.

For Fiscal 2015...

Tyson Foods said it will not achieve its previous earnings guidance unless beef market conditions improve rapidly. The company now forecasts adjusted earnings of $3.10 - $3.20 per share, down from the prior range of $3.30 - $3.40 per share.

The company expects sales to approximate $41 billion for fiscal 2015, which is over 9% growth compared to fiscal 2014, driven primarily by Hillshire Brands results offset by reductions in International operations.

The Street now expects the company to earn $3.20 per share for the year on revenues of $41.08 billion.

For Fiscal 2016...

The company expects domestic protein production to increase about 3% from fiscal 2015 levels. Grain supplies are expected to decrease, which should result in higher input costs as well as increased costs for cattle and hog producers. The company expects adjusted EPS growth of 10% plus compared to fiscal 2015.

Tyson Foods said it is on track for about $300 million this year and expect more than $400 million in 2016 and more than $600 million in 2017.

The company also expects to increase share repurchases under its share repurchase program in fiscal 2016. At the end of the third quarter, 27.9 million shares remained authorized for repurchases.

In The Last Quarter...

Third-quarter net income attributable to the company rose to $343 million or $0.83 per share from $260 million or $0.73 per share in the year ago quarter.

Adjusted net income was $0.80 per share, compared to $0.75 per share in the prior-year period. On average, ten analysts polled by Thomson Reuters expected earnings of $0.92 per share. Analysts' estimates typically exclude certain special items.

Sales increased 4% to $10.07 billion from $9.68 billion in the year-ago quarter. Analysts were looking for revenues of $10.30 billion.

Total sales volume during the quarter rose 3.4% from last year, while average price increased 0.6%.

Donnie Smith, president and chief executive officer of Tyson Foods said, "Our beef business suffered from export market disruptions that had an $84 million impact on third quarter results, and we continue to see very high cattle costs at a time when product values and export issues are making it difficult to realize expected revenue levels in this spread business."

Most Recently...

The company announced its plans to discontinue operations at two plants, as part of its efforts to improve the overall performance of its prepared foods business. The decision will affect about 880 people, including about 480 at Chicago and about 400 at Jefferson.

Both the pepperoni plant in Jefferson, Wisconsin and the Chicago, Illinois, facility, which makes prepared foods for the hospitality industry, are expected to cease operations during the second half of the company's fiscal year 2016, which ends October 1, 2016.

According to Tyson Foods, the planned closures are due to a combination of factors including changing product needs, the age of both facilities and prohibitive cost of renovations, as well as the distance of the Chicago plant from its raw material supply base. (dpa)

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