Tyson CEO: ‘Time to turn it on’

Tyson Foods executives say the future is bright for nation’s largest meat company, who remains laser focused on returning shareholder profits in 2012. That was the central message shared with about 50 investors who gathered in Springdale this morning (Feb. 3) for the company’s annual shareholder meeting.

The formal event lasted a sum total of 16.5 minutes. Despite the brief agenda, there was ample enthusiasm as Tyson executives celebrated 2011 as the second best year in company history.

Commentary was soaked in optimism as Tyson Foods CEO Donnie Smith said “the turnaround is done, now it’s time to turn it on.”

Tyson’s resilience amid a backdrop of unpredictable dynamics continues to surprise analysts. Flush with cash, Tyson said it will spend about $850 million in 2012 reinvesting in global expansions in Brazil and China. Tyson proved in 2011, a 15% return on investment, but said the efforts abroad will take about three years to reach that level. To date, Tyson has spent about $700 million on poultry expansions in Brazil and China.

Shareholders will also get a boost as Tyson Foods continues to repurchase outstanding stock. In the back half of fiscal 2011 Tyson bought back 9.7 million shares, repurchasing another 1.8 million shares in the fiscal first quarter of 2012. Dennis Leatherby, chief financial officer, said the total of shares repurchased equal about 3% of the outstanding stock.

Tyson shares have rallied over the last 12 months, with the stock up about 12%, despite unpredictable operating dynamics in multiple protein segments. CNBC Mad Money host Jim Cramer said this week he couldn’t recommend Tyson as a buy, despite management’s efforts to consistently outperform their piers. He said the business is too hard to predict. In short, there are easier ways to turn a buck than betting on a very complicated meat company, he added.

Others like Tyson for the long term. Farha Aslam, with Stephens Inc., gives the stock a neutral position. She rates the company’s target price at $21, recently reduced from $24 ahead of earnings. In heavy mid-day trading Tyson shares (NYSE:TSN) were vaued at $19.60, up 98 cents. For the past 52 weeks the share price has ranged for a low $15.60 to a high $21.06.

Local shareholders like Terry Phipps said he’s owned the stock for years.

“I love this company, my father worked his whole life driving for Tyson,” he shared with Smith following the meeting.

The Board of Directors elected are:
Chairman John Tyson
Kathleen M. Bader
Gaurdie E. Banister Jr.
Jim Kever
Kevin M. McNamara
Brad T. Sauer
Robert Thurber
Barbara A. Tyson
Albert C. Zapata