Tyson Foods Inc has just raised its earnings forecast for the new year after realizing strong performances in the company’s Pork and Beef segments which raised the meat producer’s earnings by nearly 30 percent in just the first quarter of 2017.
Furthermore, the company has attributed its net income for the quarter, which ended at the close of 2016, with a total of 593 million. This is the equivalent of $1.59 per share but, more importantly, helped to elevate January’s reported first quarter income of 461 million, or $1.15 per share. Overall, though, Q4 sales totaled $9,182 million, which is notably higher than the $9,152 million the company reported just last year.
According to Tyson Foods president and CEO, Tom Hayes, “The year is off to the best start in company history with record earnings, record operating income and record cash flows. Return on sales for each operating segment was in or above the normalized range. The tremendous returns generated in the Beef and Pork segments are providing fuel for growth in our value-added Chicken and Prepared Foods segments.”
He goes on to say, “Tyson Foods again led retail food manufacturers in both sales volume and sales dollars for the 13-week period corresponding with our fiscal first quarter. Not only did we lead in sales volume, according to IRI, we were the only company to show volume growth among the top 10 branded food companies.”
Beef volume sales have increased on improved availability of cattle as well as higher domestic availability of beef supplies and even lower livestock costs. In addition, operating income increased to $299 million as the market conditions are far more favorable than have been in the past: max revenues are higher while cattle feed costs are much lower.
In the Pork segment, supplies of live hogs increased, which lowered livestock cost and average sales price, Tyson said. Operating income increased to $247 million on stronger export markets and operational and mix performance, which were partially offset by higher operating costs.
Hayer continues, “Due to our outstanding performance in Beef and Pork and strong market conditions in the first quarter, we are raising our annual earnings guidance to $4.90-5.05 per share. We expect the earnings cadence for the remainder of the fiscal year to follow more normal patterns, including the seasonality typical of our second quarter.”
Finally, he also adds, “We’re on a path toward what we expect to be our fifth straight year of record results. Our path won’t be linear, but our team is focused on delivering long-term growth and creating shareholder value.”