Tyson Foods Q2 Results Top Estimates, Raises FY16 EPS View Above Market

(RTTNews) - Tyson Foods, Inc. (TSN) reported Monday that its second-quarter profit increased from last year, above analysts' consensus. Sales, meanwhile, declined on weak volume and pricing, yet topped estimates. Further, the company raised its forecast for fiscal 2016 earnings per share.

In pre-market activity on the NYSE, Tyson shares were gaining 4 percent to trade at $70.

For the second quarter, which is typically the most challenging quarter of the fiscal year, net income attributable to the company increased to $432 million or $1.10 per share from $310 million or $0.75 per share last year.

Adjusted attributable net income per share were $1.07, compared to $0.75 a year ago. On average, 10 analysts polled by Thomson Reuters expected earnings of $0.96 per share for the quarter. Analysts' estimates typically exclude special items.

Operating income grew 27 percent year-over-year to $704 million.

Sales, however, declined to $9.17 billion from last year's $9.98 billion. Analysts were looking for sales of $9.04 billion.

Sales volume declined 0.9 percent and average price fell 7.3 percent from the prior year. In the quarter, volume increased in chicken, beef and pork segments, but prices declined.

The company noted that sales are growing in key retail product lines.

Donnie Smith, president and chief executive officer of Tyson Foods, said, "We're in a great position, and we're generating momentum that will take us into 2017 and beyond. We've produced record results in the first half of the fiscal year, and we expect continued strong performance in the second half. To reflect what we've accomplished and to demonstrate our confidence, we're raising adjusted earnings guidance for fiscal 2016 to $4.20-4.30 per share."

The company previously was expecting adjusted earnings per share in the range of $3.50 - $3.65 for fiscal year 2016.

Analysts now expects earnings of $4.06 per share for the year.

The company still expects fiscal year 2016 sales to be approximate $37 billion.

In fiscal 2016, Tyson continues to expect domestic protein production of chicken, beef, pork and turkey to increase approximately 2-3 percent from fiscal 2015 levels and moderate export growth. As a result, increased domestic availability could pressure protein pricing.