Results Tyson discloses fourth quarter and fiscal earnings
For fiscal 2019, USDA indicates domestic protein production (beef, pork, chicken and turkey) should increase approximately 3% from fiscal 2018 levels, but the company expects domestic availability of protein to increase approximately 2% as export markets should absorb a portion of the increase in production.
Through a combination of synergies from the integration of business acquisitions and additional elimination of non-value added costs, the program is focused on supply chain, procurement, and overhead improvements, and savings are expected to be realized in the Prepared Foods and Chicken segments.
Beef: Sales volume increased due to improved availability of cattle supply, stronger demand for their beef products and increased exports. Average sales price decreased for the fourth quarter of fiscal 2018 associated with increased availability of live cattle supply and lower livestock costs. Average sales price increased for fiscal 2018 as demand for their beef products and strong exports outpaced the increase in live cattle supplies in the first six months of fiscal 2018, partially offset by lower livestock costs in the back half of fiscal 2018. Operating income increased as the firm continued to maximize their revenues relative to live fed cattle costs, partially offset by increased labor and freight costs and one-time cash bonus.
Pork: Sales volume decreased as a result of balancing their supply with customer demand during a period of margin compression. The average sales price decrease for fiscal 2018 was associated with lower livestock costs. Operating income decreased from prior year record results due to periods of compressed pork margins caused by excess domestic availability of pork, higher labor and freight costs, and one-time cash bonus of $12 mill. incurred in the second quarter of fiscal 2018.
Chicken: Sales volume increased primarily due to incremental volume from business acquisitions. Average sales price decreased for the fourth quarter of fiscal 2018 due to sales mix associated with acquisitions and lower export sales prices. Average sales price increased for fiscal 2018 due to sales mix changes and price increases associated with cost inflation, partially offset by reduced average sales prices in the fourth quarter of fiscal 2018. Operating income decreased due to increased labor, freight and growout expenses, in addition to $103 mill. and $61 mill. for the twelve months and fourth quarter of fiscal 2018, respectively, of higher feed ingredient costs and net realized and mark-to-market derivative losses.