Tyson Foods Q4 Profit Tops View, Revenues Match; Provides Rosy Revenue Outlook

(RTTNews) - Meat products provider Tyson Foods, Inc. (TSN) reported Monday a profit for the fourth quarter that increased from last year, reflecting improved margins and revenue growth, amid increased volume and pricing. The results were boosted by primarily chicken and beef operations.

Earnings per share topped analysts' expectations by a penny, while quarterly revenues matched their estimates. The company also provided revenue guidance for the full-year 2014, just above Street view. "We had a great fourth quarter, and 2013 was the best year in company history in terms of record sales and earnings per share. The company achieved these results while buying back $550 million in stock, paying more than $100 million in dividends, continuing to build out operations in China and growing our prepared foods business through acquisitions and by entering new product categories," President and CEO Donnie Smith said.

The Springdale, Arkansas-based company reported net income of $261 million or $0.70 per share for the fourth quarter, higher than $185 million or $0.51 per share in the prior-year quarter.

Net income from continuing operations for the year-ago quarter was $0.57 per share and adjusted net income from continuing operations was $0.55 per share.

On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.69 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter increased 7 percent to $8.89 billion from $8.32 billion in the same quarter last year, and matched ten Wall Street analysts' consensus estimate of $8.89 billion. Total volume grew 1.5 percent and average prices increased 5.9 percent.

Chicken sales grew to $3.16 billion from $2.96 billion, with volume growth of 2.4 percent and average price increase of 4.3 percent. Beef sales also increased to $3.75 billion from $3.43 billion last year, with volume growth of 4.1 percent and average price increase of 4.8 percent.

Pork sales improved to $1.40 billion from $1.32 billion, with average price increase of 12.6 percent, but volumes declined 5.6 percent. Prepared Foods sales also grew to $881 million from $805 million, with volume growth of 5.2 percent and average price increase of 3.9 percent.

Operating margin for the quarter expanded 40 basis points to 4.7 percent, as gross margin improved 40 basis points to 7.5 percent from last year. Margins improved in chicken and beef segments, partially offset by a drop in pork and prepared foods segments.

For fiscal 2013, Tyson reported net income of $778 million or $2.12 per share, higher than $583 million or $1.58 per share in the previous year. Net income from continuing operations for fiscal 2013 was $1.68 per share and adjusted net income from continuing operations was $1.97 per share. Analysts expected the company to earn $2.22 per share.

Sales for the year grew 4 percent to $34.37 billion from $33.06 billion in the prior year, but missed analysts' consensus estimate of $34.43 billion.

Looking ahead to fiscal 2014, Tyson Foods expects sales of about $36 billion, while Street is currently looking for sales of $35.69 billion.

Separately, Tyson Foods said it has created several new leadership roles to support future growth in its domestic and international protein and prepared foods businesses. Further, the firm announced that its COO Jim Lochner will retire in September 2014 after an over 30-year career at Tyson Foods and IBP, inc. Lochner will continue to serve in an advisory capacity through the end of 2017.

TSN closed Friday's regular trading session at $28.77, up $0.06 on a volume of 5.48 million shares. In the past 52-week period, the stock has been trading in a range of $17.65 to $32.40.