US meat company
Tyson Foods
reported on Monday that it had net income of
US$ 145 million
, or
US$ 0.42
per share, in the second fiscal quarter of 2024, ended
March 30
. In the same period of the previous fiscal year, the company posted a net loss of
$97 million
(a loss of
$0.28
per share). On an adjusted basis, net income stood at
US$ 0.62
per share, compared to an adjusted net loss of
US$ 0.04
per share obtained in the same period of 2023. Sales revenue fell by 0.5%, from
US$ 13.133 billion
to
US$ 13.072 billion
.
Wall Street
analysts had estimated net income of
US$ 0.39
per share, below that obtained by the company. However, revenue was below the consensus, which expected sales of
$13.16 billion
.
Tyson
had an average price increase of 1% in its operating segments, but a drop in sales volume of 1.5% in the period. As a result, beef sales revenue rose 7.3% in the second fiscal quarter to
$4.954 billion
, with a 2.8% rise in sales volume, while the average price of the product rose 4.5%. The division, the largest in terms of revenue, recorded an operating loss of
$35 million
. Beef processors are bracing themselves for a period of prolonged losses after low profitability and drought led ranchers to reduce their cattle herds.
In addition, revenue from pork sales rose 4.6% to
US$1.486 billion
, with sales volume up 2.9% and average price up 1.7% year-on-year. Revenues from the prepared foods segment rose 0.75% to
US$ 2.404 billion
, with a 0.7% rise in sales volume, but a 1.4% drop in the average price of products.
Chicken sales, however, fell by 8.2% in revenue, reaching
US$ 4.065 billion
. In volume, the drop was 6.1%, while prices were 2.1% lower. Despite this, the company's poultry unit, which accounts for around a fifth of the US supply, made an operating profit of
US$ 158 million
, compared to a loss of
US$ 258 million
in the previous year's quarter. Last year,
Tyson
experienced a glut of chicken on the market and higher costs. Chicken processors are now benefiting from falling grain prices and more consumers choosing chicken as beef prices rise.
"During the second quarter, we continued our positive momentum and made progress on our key initiatives. The strategies we implemented are generating tangible results, as evidenced by our return to year-over-year net income growth," CEO
Donnie King
said in a statement. "Looking ahead to the second half of the year, we will remain focused on executing on fundamentals and leveraging our multi-protein portfolio. We are energized by our progress to date and focused on driving long-term value."
For fiscal year-to-date 2024,
Tyson Foods
raised its adjusted operating profit forecast to between
$1.4 billion
and
$1.8 billion
, up from the previous range of
$1 billion
to
$1.5 billion
. Regarding sales, the company expects them to be relatively stable compared to last year.
For the beef segment, the company said it anticipates an adjusted operating loss of between
$400 million
and
$100 million
in fiscal year 2024, considering that the
US Department of Agriculture
(USDA) projects a decrease in domestic production of approximately 2% for the year. In the pork segment,
Tyson
expects an adjusted operating profit of
$50 million
to
$150 million
, while the chicken business is expected to reach
$700 million
to
$900 million
.
