Tyson Foods on Track for New 52-Week High After Earnings

Companies and Brands

Published: May 9, 2016 8:25 am

Last Updated: January 13, 2020 9:42 am

Tyson Foods Inc. (NYSE: TSN) reported second-quarter fiscal 2016 results before markets opened Monday. The food processing company posted adjusted earnings per share (EPS) of $1.07 on revenues of $9.17 billion. In the same period a year ago, the company reported EPS of $0.75 on revenues of $9.98 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.96 and $9.04 billion in revenues.

Year over year, operating income improved from $547 million to $704 million in the quarter and net income rose from $311 million to $434 million. The company took the opportunity to raise its full-year EPS guidance from a prior range of $3.85 to $3.95 to a new range of $4.20 to $4.30. That’s well above the consensus estimate of $4.06.

Not including shares repurchased to offset dilution from the company’s equity compensation plan, Tyson bought back 6.9 million shares in the quarter for a total of $400 million.

In its outlook discussion, Tyson said it expects operating margin of more than 12% in its chicken segment, up from a prior forecast of more than 11%. The expected operating margin in the beef business is forecast to be within its normalized range of 1.5% to 3.0%. The prior forecast had margin at or above the normalized range. Operating margin in the pork business is now forecast at around 10%, up from the previous forecast calling for margins to be above the normalized range of 6% to 8%. Margin in the prepared food division continues to be forecast near the low end of the normalized range of 10% to 12%.

The forecast for total sales is unchanged at $37 billion. Analysts have a consensus forecast of $37.03 billion.

Shares traded up about 4.5% in Monday’s premarket session, at $70.30, above the current 52-week range of $39.05 to $68.84. The stock closed at $67.25 on Friday. Thomson Reuters had a consensus analyst price target of $69.91 before the report.

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