Net income up 4.47% for Tyson Foods in first half of fiscal year, revenue declines

Net income for Tyson Foods during the first half of its fiscal year was $933 million, up 4.47% compared to the same period in 2016. First half revenue of $18.265 billion was just under the $18.322 billion in the same period of the previous fiscal year.

Operating income reductions for the first half of the year included $23 million in the chicken segment related to two plant fires, and $52 million in the prepared foods segment.

“We’re half way to another strong year of financial performance at Tyson, and we reiterate our adjusted earnings guidance of $4.90-5.05 per share, which would be approximately 12% growth over the prior year,” Tyson Foods CEO Tom Hayes noted in the earnings report posted early Monday (May 8).

The company also said the $4.2 billion acquisition of AdvancePierre should close in the third fiscal quarter, and is estimated to add $1.7 billion in sales for fiscal 2018. AdvancePierre produces ready-to-eat lunch and dinner sandwiches, sandwich ingredients, and snacks. Barber Foods is one of AdvancePierre’s most recognizable brands. The company posted full year 2016 net income of $136 million on revenue of $1.56 billion.

Second quarter net income reached $340 million, down from the $432 million in the same quarter of 2016. The adjusted earnings per share of $1.01 missed the consensus estimate of $1.02. Revenue in the second quarter was $9.083 billion, below the $9.17 billion in the second fiscal quarter of 2016, but above the consensus estimate of $9.05 billion.

“Our Beef and Pork segments generated tremendous operating income in the second quarter, allowing us to invest in the long-term growth of our value-added businesses,” Hayes noted. “Our Prepared Foods segment results were negatively affected by the on-going challenges in our pizza toppings and ingredients meats businesses discussed last quarter. We expect our results to improve as we continue to address operational efficiency and capacity through fiscal year 2018. Unfortunately, we experienced fires in two chicken plants in our second quarter. Had it not been for the fires, our Chicken segment return on sales would have been within its normalized range.”

SEGMENT PERFORMANCE
The company’s beef and pork segments posted adjusted operating gains in the first half of the fiscal year, with the chicken and prepared food segments showing declines compared to the same period in the previous fiscal year.

• Beef
Sales-First fiscal half 2017: $7.015 billion
Sales-First fiscal half 2016: $7.253 billion

Adjusted operating income-First fiscal half 2017: $425 million
Adjusted operating income-First fiscal half 2016: $117 million

• Pork
Sales-First fiscal half 2017: $2.554 billion
Sales-First fiscal half 2016: $2.403 billion

Adjusted operating income-First fiscal half 2017: $388 million
Adjusted operating income-First fiscal half 2016: $298 million

• Chicken
Sales-First fiscal half 2017: $5.504 billion
Sales-First fiscal half 2016: $5.373 billion

Adjusted operating income-First fiscal half 2017: $496 million
Adjusted operating income-First fiscal half 2016: $705 million

• Prepared foods
Sales-First fiscal half 2017: $3.646 billion
Sales-First fiscal half 2016: $3.7 billion

Adjusted operating income-First fiscal half 2017: $329 million
Adjusted operating income-First fiscal half 2016: $404 million

Talk Business & Politics will update this story later today.