Tyson Foods Q1 Profit Up 49%; Raises FY16 Profit View, But Cuts Sales Outlook

(RTTNews) - Meat products maker Tyson Foods Inc. (TSN) reported a profit for the first-quarter that increased 49% from last year. It raised its profit outlook for fiscal year 2016 ,but it cut its annual sales guidance.

Adjusted earnings per share topped analysts' expectations, while quarterly sales missed their estimates.

"Due to our strong results in the first quarter and our positive outlook on the rest of the year, we are raising our fiscal 2016 earnings guidance to $3.85 - $3.95 per share. We have a consumer-relevant portfolio packed with advantaged brands in advantaged categories, we have a superior supply chain, and we have a high-performing team focused on execution. I'm really excited about what's ahead," said Donnie Smith, president and chief executive officer of Tyson Foods. Previously, the company expected adjusted earnings per share to be in the range of $3.50 - $3.65 for fiscal year 2016.

The company now expects fiscal year 2016 sales to be approximate $37 billion. This is down from its previous estimate of $41 billion due to declines in beef, pork and feed prices.

Wall Street currently is looking for fiscal year 2016 earnings of $3.63 per share on annual revenues of $39.83 billion.

In fiscal 2016, the company expect domestic protein production (chicken, beef, pork and turkey) to increase approximately 2-3% from fiscal 2015 levels and moderate export growth. As a result, increased domestic availability could pressure protein pricing.

Net Income Attributable to the company for the first-quarter rose about 49% to $461 million from last year's $309 million, with earning per share improving to $1.15 from $0.74 last year.

Adjusted net income per share grew to $1.15 from $0.77 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.89 per share. Analysts' estimates typically exclude special items.

But, quarterly sales declined to $9.15 billion from $10.82 billion in the prior year. Wall Street expected revenues of $10.07 billion for the quarter.

In fiscal 2016, the company expects to increase share repurchases under share repurchase program. As of January 2, 2016, 13.5 million shares remain authorized for repurchases.

On February 4, 2016, Board of Directors approved an increase of 50 million shares authorized for repurchase under share repurchase program. During the second quarter of fiscal 2016 to date, it repurchased approximately 3.9 million shares for $200 million, excluding shares repurchased to offset dilution from equity compensation plans.