Tyson Foods tops quarterly estimates as meat sales rebound

8:15 am Monday, August 05th, 2024

(Reuters) – Tyson Foods surpassed Wall Street expectations for third-quarter revenue and profit on Monday as sales of meat products rebounded while lower grain prices reduced costs for animal feed.

The company’s sales fell in 2023, but it has been helped by some customers buying more at grocery stores as higher costs for dining out push people to cook more meals at home.

The U.S. meat packer’s net sales rose 1.6% to $13.35 billion in the quarter, compared with analysts’ estimates of $13.24 billion. It continues to expect full-year revenue to be flat compared to fiscal 2023.

The company’s beef segment – its largest – saw volumes up 4.4%, building on the last quarter’s 2.8% growth driven by higher average carcass weights. Prices in the segment also rose 1.4% as it continued to grapple with limited cattle supply.

Still, sales in Tyson’s chicken segment, which struggled with an excess of supply during 2023, were down 3.2% in the quarter, while prices also dropped 3.7%. Previously, Tyson said it had lowered production to align supplies with consumer demand.

Tyson raised its forecast for adjusted operating income from chicken to $850 million to $950 million for fiscal 2024 from a previous forecast of $700 million to $900 million.

U.S. corn and soy futures prices have fallen near four-year lows due to ample supplies, making it less expensive for Tyson to fatten poultry.

Tyson also raised its projection for adjusted operating income in its pork business after the unit reported a 10.4% rise in quarterly sales. Volumes increased by 1.2%, compared to a 2.9% increase in the second quarter, when the company saw more hog supplies.

The company has sold off a poultry facility, shuttered six U.S. chicken plants, said it would close a pork plant, and eliminated jobs to grow profit margins.

Tyson posted adjusted earnings of 87 cents per share, topping estimates of 65 cents, according to LSEG data.

The company’s shares, which have risen nearly 14% this year, rose about 2.5% in premarket trade.

Tyson suspended finance chief John R. Tyson, great-grandson of the company’s founder, in June after he was arrested for intoxicated driving.

(Reporting by Granth Vanaik in Bengaluru and Tom Polansek in Chicago; Editing by Maju Samuel and Deepa Babington)