Tyson Foods Beats on EPS but GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Tyson Foods (NYS: TSN) reported earnings on Feb. 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), Tyson Foods met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share contracted significantly.

Margins dropped across the board.

Revenue details
Tyson Foods tallied revenue of $8.33 billion. The 14 analysts polled by S&P Capital IQ hoped for revenue of $8.29 billion. Sales were 9.4% higher than the prior-year quarter's $7.62 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.42. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.34 per share on the same basis. GAAP EPS of $0.41 for Q1 were 48% lower than the prior-year quarter's $0.79 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 5.9%, 390 basis points worse than the prior-year quarter. Operating margin was 3.3%, 320 basis points worse than the prior-year quarter. Net margin was 1.9%, 200 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $8.48 billion. On the bottom line, the average EPS estimate is $0.45.

Next year's average estimate for revenue is $34.41 billion. The average EPS estimate is $2.06.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 261 members out of 332 rating the stock outperform, and 71 members rating it underperform. Among 94 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 78 give Tyson Foods a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Tyson Foods is outperform, with an average price target of $22.86.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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