Tyson Foods' Results Mixed, Outlook Cautious


Tyson Foods Inc. (NYSE: TSN) reported fiscal fourth-quarter 2012 adjusted diluted earnings per share (EPS) of $0.55 and $8.37 billion in revenues before markets opened this morning. In the same period a year ago, the food processing company reported EPS of $0.18 on revenue of $8.4 billion. Today's results also compare to the Thomson Reuters consensus estimates for EPS of $0.44 and $8.49 billion in revenue.

On a GAAP basis, Tyson's EPS totaled $0.51, compared with $0.26 in the same period a year ago. The company took a noncash impairment charge of $15 million "related to noncore assets in China."

For the full year, the company posted adjusted EPS of $1.91, on revenues of $33.28 billion. In the 2011 fiscal year, Tyson's EPS totaled $1.89 on revenues of $32.27 billion. The consensus estimate called for EPS of $1.78 on revenues of $33.35 billion.

The company's CEO said:

Our earnings for the fourth quarter and fiscal year indicate that Tyson Foods is rising above the noise of commodity markets to produce solid, more consistent results. It has taken us several years and a lot of work to get to this point, and although there is much more to be done, I believe we have reached a new level of sustainable performance.

The company guided fiscal year 2013 revenues at $35 billion but did not provide EPS guidance. The consensus estimates for 2013 call for EPS of $1.57 on revenues of $34.87 billion.

Tyson expects drought-caused higher costs for grain will lower U.S. domestic protein (meat) production by 2%. The combination could be a wash, but more likely is that prices to consumers will more than make up for the higher costs. Tyson expects profits in its chicken segment could be below its normalized range of 5% to 7%, that beef profits will be below the normalized range of 2.5% to 4.5%, that pork profits will be above the normal range of 6% to 8%, and that profits in the prepared foods segment will be within the normal range of 4% to 6%.

Shares are up about 2.1% in premarket trading, at $17.24, in a 52-week range of $14.06 to $21.06. Thomson Reuters had a consensus analyst price target of around $18.10 before today's report.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Earnings, Food Tagged: TSN