Categories Analysis, Consumer, Retail

Tyson Foods stock falls on weak Q4 revenue, outlook

Tyson Foods (TSN) reported a 37% jump in earnings for the fourth quarter helped by lower costs and expenses. The bottom-line exceeded analysts’ expectations. Shares of the meat producer slipped over 3% in the premarket session as the top-line missed consensus estimates and gave a weak outlook.

Net income attributable to the company climbed by 37% to $537 million or $1.47 per share, while adjusted EPS increased by 10.5% to $1.58. Lower enacted tax rates positively impacted the fourth quarter adjusted EPS by $0.20.

Sales slid 4.1% to $9.99 billion as Pork and Prepared Foods segments faced stiff headwinds.

Tyson Foods fourth quarter 2018 Earnings Infographic
Tyson Foods Q4 2018 Earnings Infographics

Looking ahead into the full year 2019, the company expects adjusted earnings in the range of $5.75 to $6.10 per share. The forecast excludes any potential impact from the closing of the Keystone acquisition and is relatively equal to fiscal 2018 earnings when excluding the income from businesses held for sale before they were divested.

For the fiscal year 2019, sales are anticipated to grow to $41 billion due to volume growth and mix. Most of the sales growth is expected to occur in the Chicken segment, as well as expected growth in the Prepared Foods segment after excluding the impact of the divestitures.

Tyson Foods expects capital expenditures to approximate $1.5 billion for fiscal 2019. Net interest expense is predicted to be about $350 million. The company expects total liquidity, which was about $1.4 billion on September 29, 2018, to remain above its minimum liquidity target of $1 billion.

Tyson Foods Q3 profit tops estimates

Effective November 12, 2018, the board of directors lifted the quarterly dividend to $0.375 per share on Class A common stock and $0.3375 per share on Class B common stock. The dividend is payable on December 14, 2018, to shareholders of record on November 30, 2018. The board also declared a quarterly dividend of $0.375 per share on Class A common stock and $0.3375 per share on Class B common stock, payable on March 15, 2019, to shareholders of record on March 1, 2019.

For the fourth quarter, beef sales volume rose 3.4% on improved availability of cattle supply, stronger demand for its beef products and increased exports. The average sales price of Beef inched down 0.6% due to higher availability of live cattle supply and lower livestock costs. Prepared Foods volume dropped 7.9% while average price climbed 11.8%.

Pork sales volume declined 2.7% for the fourth quarter due to balancing supply with customer demand during a period of margin compression, and average sales price fell 14.5% due to lower livestock costs. Chicken sales volume jumped 10.4% on incremental volume from business acquisitions, while average price fell 7% due to sales mix associated with acquisitions and lower export sales prices.

Shares of Tyson ended Monday’s regular session down 0.79% at $61.61 on the NYSE. The stock fell over 16% in the past year and 24% in the year so far.

 

Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text.

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