Tyson Foods Beef and Prepared Foods benefited in QI
Net income for the quarter was $551 mill., lower when compared to the same period of the previous year when the company earned $1,631 mill. Items affecting earnings comparability included tax legislation passed at the end of 2017.
First-quarter sales dipped slightly to $10,193 mill. from $10,229 mill. the year prior.
Tyson’s Beef business generated sales of $3,926 mill. during the quarter, up slightly from $3,886 mill. the year prior. Prepared Foods sales dipped to $2,149 mill. during the quarter after Tyson Foods divested its frozen bakery businesses in June 2018. Reflecting on the evolution of Tysons’ Prepared Foods business unit following the acquisition of Hillshire Brands in 2014, Mr. Noel White, president and chief executive officer, said: “We’ve grown the business from $4 bn. in sales with basically a 1% return in 2014 to a business that, in fiscal 2019, is projected to produce over $8 bn. in sales and 11% to 12% return and approximately $1 bn. in operating income.”
Pricing was an issue for the company’s Chicken business. Sales volume rose 17% during the quarter and the average price was down 13%, according to the company. Part of the reason was the acquisition of the rendering business American Proteins in 2018. Chicken sales for the quarter rose to $3,115 million.
Pork business unit sales fell to $1,179 mill. during the quarter from $1,283 mill. the year prior. The company said sales volume decreased as a result of balancing supply with customer demand. Mr. White said the company is working to enhance revenue per head through the development of premium programs and growth of its export business. An outbreak of African Swine Fever in China could offer export opportunities as well as the resolution of trade disputes with Canada and Mexico.
With the acquisitions of Keystone Foods and BRF S.A., Tyson Foods expects to see its sales rise to $43 bn. in fiscal 2019 from $40 bn. in fiscal 2018.