5 key takeaways from Tyson Foods’ Q2 earnings report
- Tyson Foods beats Wall Street estimates in the fiscal second quarter.
- More than 42,000 of Tyson's staff members have been vaccinated so far.
- Tyson Foods Inc expects its adjusted beef sales to improve this year.
Tyson Foods Inc. (NYSE: TSN) reported its financial results for the fiscal second quarter on Monday that topped analysts’ estimates for earnings and revenue. The largest U.S. meat processor attributed its hawkish performance to robust demand for chicken products as hotels and restaurants started to reopen across the country.
1. Financial performance
Tyson Foods said that its net income in the second quarter printed at £337.31 million (92 pence per share). In the same quarter last year, its net income was capped at a lower £266.45 million (73 pence per share). On an adjusted basis, the American multinational earned 95 pence per share in Q2.
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Tyson Foods generated £8.01 billion of sales in the recent quarter versus the year-ago figure of £7.72 billion. According to FactSet, experts had forecast the company to post £7.93 billion of sales in the second quarter and 82 pence of adjusted EPS. In the prior quarter (Q3), Tyson Foods had recorded £337.66 million of net income.
2. Sales from individual segments
Tyson Foods reported a 5.8% annualised decline in its second-quarter beef sales on Monday. Chicken sales, it added, were down 3.2% compared to last year, while prepared foods and pork segments noted a 4.2% decline and a 0.5% decline, respectively.
In related news, U.S. Foods also reported better than expected quarterly sales on Monday.
3. Other notable figures
Other notable figures in Tyson Foods’ earnings report on Monday include £1.84 billion of liquidity and £67.32 million of COVID-19 related expenses. More than 42,000 of its staff members have been vaccinated so far. The Springdale-based firm slashed its total debt in Q2 by roughly £710 million.
4. Guidance for fiscal 2021
For fiscal 2021, Tyson Foods forecasts its beef sales (adjusted) to improve compared to the previous financial year. Chicken and pork sales, on the other hand, are expected to remain under pressure in 2021. According to the NYSE-listed company, prepared foods sales will remain somewhat similar to 2020 this year.
5. CEO Dean Banks’ remarks
Commenting on the financial report, CEO Dean Banks said on Monday:
“We’re seeing substantial inflation across our supply chain, which will likely create margin pressure during the back half of the year. We will remain focused on the factors we can control. Our long-term outlook is bright as global protein consumption continues to grow, and we expect our investments in capacity expansion, product innovation and technology to create sustainable shareholder value.”
Impact on the share price
Tyson Foods shares jumped more than 0.5% in premarket trading on Monday. The stock is currently about 25% up year-to-date. At the time of writing, Tyson Foods is valued at £20.37 billion and has a price to earnings ratio of 14.52.