Tyson Foods beats third-quarter estimates

By Aidan Fortune contact

- Last updated on GMT

Tyson's third quarter was more positive than expected
Tyson's third quarter was more positive than expected

Related tags: Beef, Pork, Poultry

US producer Tyson Foods has shaken off internal and analyst pessimism to deliver a third quarter of solid growth.

The company’s earnings rose 21% to $541m from $447m in the same period of 2017. The business had readjusted its earnings earlier this year​ due to trade uncertainty and rising tariffs.

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

“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. 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.”

Sector breakdown

Its beef division benefited from an improved cattle supply in terms of volume sales, up 2.7% during the quarter, but this extra availability meant that the average sale price decreased, down 2.8%.

Pork didn’t fare as well, with sales volume and average sale prices down for the quarter. Operating income for the quarter was down year-on-year, due to excess domestic availability as well as higher labour and freight costs.

Tyson’s chicken sales volumes were down slightly year-on-year due to sluggish demand for certain chicken products. Its prepared foods division saw a sales volume rise over the period.

In its outlook, Tyson cited US Department of Agriculture figures, which estimated domestic protein production in 2019 should increase approximately 2-3% from fiscal 2018 levels. Tyson predicted that its beef and pork divisons’ operating margins would be 6% in 2019, with chicken up to 8%.

Related topics: Meat

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