Tyson posts record 6-month results
Tyson Foods Inc., one of the world's largest food companies with leading brands including Tyson, Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright, Aidells and State Fair, reported the following results: sales for the second quarter were $9.038 billion, down from 2016’s Q2 results of $9.170. Sales for the first six months of the fiscal year were $18.265 billion, compared to 2016’s results of $18.322 billion. Operating income of the first half of the year was $935 million, an increase from $895 million in the previous fiscal year.
“We generated record adjusted EPS in the first half of the fiscal year,” said Tom Hayes, president and chief executive officer of Tyson Foods. “Despite seasonal challenges typical of our second quarter and one-time events, adjusted earnings per share was up 17% over the first half of fiscal 2016.
“Our Beef and Pork segments generated tremendous operating income in the second quarter, allowing us to invest in the long-term growth of our value-added businesses. Our Prepared Foods segment results were negatively affected by the on-going challenges in our pizza toppings and ingredients meats businesses discussed last quarter. We expect our results to improve as we continue to address operational efficiency and capacity through fiscal year 2018. Unfortunately, we experienced fires in two chicken plants in our second quarter. Had it not been for the fires, our Chicken segment return on sales would have been within its normalized range.
“We are experiencing continued strong volume and share growth in our retail Core 9 product lines, which are some of our most profitable businesses. The Core 9 growth illustrates that we get results when we focus our efforts on doing what we do best - innovating, understanding what motivates consumers, building brands and helping our customers grow their businesses.
“We are concentrating on growing our protein-packed brands as demonstrated by our announcements two weeks ago of our intended merger with AdvancePierre Foods and the expected sale of some non-protein businesses. We plan to grow Tyson Foods and fuel that growth with next generation manufacturing capabilities focused on fresh and convenient foods that consumers demand across both retail and foodservice channels.
“We’re half way to another strong year of financial performance at Tyson, and we reiterate our adjusted earnings guidance of $4.90-5.05 per share, which would be approximately 12% growth over the prior year.”
In fiscal 2017, USDA indicates domestic protein production (beef, pork, chicken and turkey) should increase approximately 3-4% from fiscal 2016 levels, but strong export markets should partially offset the increase. Tyson says that as the company continues with the integration of Hillshire Brands, it expects to realize synergies of around $675 million in fiscal 2017 from the acquisition as well as its profit improvement plan for its legacy Prepared Foods business with some incremental synergies expected to be realized in fiscal 2018. The majority of these benefits will be realized in Tyson’s Prepared Foods segment.
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Source: Tyson Foods Inc.