Tyson Foods Earnings: Here’s Why Shares are Down Now

Tyson Foods Inc. (NYSE:TSN) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 6.06%.

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Tyson Foods Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 18.18% to $0.36 in the quarter versus EPS of $0.44 in the year-earlier quarter.

Revenue: Rose 1.83% to $8.42 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Tyson Foods Inc. reported adjusted EPS income of $0.36 per share. By that measure, the company missed the mean analyst estimate of $0.45. It missed the average revenue estimate of $8.58 billion.

Quoting Management: “Our second quarter typically is our most challenging, and this quarter was no exception,” said Donnie Smith, Tyson Foods’ president and chief executive officer. “However, our business is structured to withstand adverse conditions, and we worked through the issues while positioning ourselves for what we believe will be a strong performance in the second half of the year.
“In our Chicken segment, we continued to emphasize operational efficiencies, upgrading our product mix and pricing to offset $165 million in additional feed costs for the quarter. Our Beef segment suffered margin compression as consumers opted for the relative value of chicken. Our Pork segment faced periods of supply and demand imbalance after the loss of some export markets, while soft demand in food service impacted our Prepared Foods segment.
“Our EPS for the quarter wasn’t at the level we’d like, but on an adjusted basis, we’re about where we were at this point last year,” Smith said. “I’m still confident our results for 2013 will be better than 2012.”

Key Stats (on next page)…

Revenue increased 0.2% from $8.4 billion in the previous quarter. EPS decreased 25% from $0.48 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.49 to a profit $0.54. For the current year, the average estimate has moved up from a profit of $1.91 to a profit of $2.09 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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