Tyson Foods Q4 Profit Declines, Despite Higher Sales

(RTTNews) - Meat products maker Tyson Foods, Inc. (TSN) Monday reported a decline in the fourth-quarter profit, reflecting higher costs. Sales, however, climbed 14 percent on improved prices.

Donnie Smith, president and chief executive officer said, "This is an exciting time as we integrate Hillshire Brands and Tyson Foods...We're setting higher expectations and anticipating more growth and increased profitability, specifically in the Chicken and Prepared Foods segments."

The company said it is confident of meeting expected synergy amounts of $225 million or more for fiscal 2015 and more than $500 million by the end of year three.

During the quarter, sales volumes of Chicken improved 2.3 percent, and Prepared Foods volumes climbed 25.5 percent from last year. Meanwhile, sales volumes of Beef fell 2.6 percent.

For the fourth quarter, net income attributable to the company declined to $137 million or $0.35 per share from $261 million or $0.70 per share in the prior year.

On an adjusted basis, earnings per share from continuing operations were $0.87 for the recent quarter.

On average, 10 analysts polled by Thomson Reuters expected the company to report earnings of $0.76 per share for the quarter. Analysts' estimates typically exclude special items.

Total sales for the quarter climbed 14 percent to $10.11 billion from $8.89 billion a year ago. Wall Street analysts were looking for revenue of $10.16 billion.

Volumes during the period rose 2.2 percent, and average price increased 11.2 percent from last year.

Selling, general and administrative expenses advanced to $406 million from $253 million in the preceding year.

Looking ahead, for fiscal 2015, the firm expects adjusted earnings to be in the range of $3.30 to $3.40 per share. Analysts are looking for earnings of $3.33 per share for the fiscal.

The firm expects overall domestic protein production (chicken, beef, pork and turkey) to increase around 1 percent from fiscal 2014 levels.

On November 13, the board increased its quarterly dividend previously declared on July 30, 2014, to $0.10 per share on Class A common stock and $0.09 per share on Class B common stock. The increased quarterly dividend is payable on December 15, to shareholders of record on December 1, 2014.

In July, Tyson Foods announced quarterly dividend of $0.075 per share.

The board also declared a quarterly dividend of $0.10 per share on Class A common stock and $0.09 per share on Class B common stock, to shareholders of record on February 27, 2015, payable on March 13.

TSN closed Friday's trading at $40.66, down 1.26 percent. In the pre-market activity on Monday, the shares rose 3.79 percent.