Tyson Foods Company had record result

by Editor fleischwirtschaft.com
Wednesday, February 08, 2017
Photo: Tyson Foods
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Tyson Foods


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:Record EPS of $1.59, went up 38% from Q1'16, record operating income went up 27% to $982 mill. The total company sales volume increased 2.4% from Q1'16; all segments sales volume went up from prior year. This means a record total company operating margin at 10.7%, a record pork segment operating margin at 19.7%, a record beef segment operating margin at 8.5% and Chicken and Prepared Foods segment operating margin within normalized range. Summary of Segment Results
“The year is off to the best start in company history with record earnings, record operating income and record cash flows,” said Tom Hayes, president and chief executive officer of Tyson Foods. “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.

Chicken - Sales volume increased as a result of better demand for chicken products, partially offset by a decrease in rendered product sales. Average sales price increased as a result of sales mix changes which offset general market price declines. The operating income decreased due to increased marketing, advertising and promotion spend and higher operating costs which included $23 mill. of compensation and benefit integration expense. Feed costs decreased $20 mill. during the first quarter of fiscal 2017.

Beef - Sales volume increased due to improved availability of cattle supply and stronger domestic and export demand for our beef products. Average sales price decreased due to higher domestic availability of beef supplies and lower livestock cost. The operating income increased due to more favorable market conditions as we maximized our revenues relative to the decline in live fed cattle costs, partially offset by higher operating costs.

Pork - Sales volume increased due to strong demand for our pork products and increased exports. Live hog supplies increased, which drove down livestock cost and average sales price. The operating income increased as we maximized our revenues relative to the live hog markets, partially attributable to stronger export markets and operational and mix performance, which were partially offset by higher operating costs.

Prepared Foods - Sales volume increased due to improved demand for our prepared foods products. Average sales price decreased primarily due to a decline in input costs of approximately $100 mill., partially offset by product mix changes. The operating income decreased due to higher operating costs at some of our facilities, increased marketing, advertising and promotion spend and $22 mill. of compensation and benefit integration expense. Additionally, Prepared Foods operating income was positively impacted by $127 mill. in synergies, of which $32 mill. was incremental synergies in the first quarter of fiscal 2017 above the $95 mill. of synergies realized in the first quarter of fiscal 2016. The positive impact of these synergies to operating income was partially offset with investments in innovation, new product launches and supporting the growth of our brands.

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