Tyson Foods expected to see 86% earnings growth in the fourth quarter

Springdale-based Tyson Foods is expected to post adjusted earnings per share of 69 cents, up 86% from a year ago, according to the consensus estimate. Net income is forecast at $237 million, up 78% year over year and revenue is expected to top $13.39 billion, up 0.3%.

The estimate is for the company’s fourth quarter ending Sept. 30 and reported on Nov. 12.

For fiscal 2024, Tyson is expected to post revenue of $53.15 billion, up 0.5% from a year ago. Net earnings per share are expected to total $2.86, up 113% from a year ago.

Operating income for the fourth quarter is expected to total $451 million, up 91% from a year ago. Chicken is the growth catalyst for Tyson Foods with operating profit expected to top $279 million, up 272% from a year ago. The chicken margin has recovered to around 6.5% well above the normal range thanks to lower feed costs and lower chicken supplies boosting prices.

The prepared foods segment is expected to post operating profits of $229 million, up 52% year over year. Operating margins are expected to be 9.2%, slightly above the normalized range. Market share for brands in the segment are up, including a 5% gain with Ball Park, and a 13.3% gain with Jimmy Dean.

Tyson’s beef and pork segments have their own challenges. Beef losses are pegged at $97.6 million, down more than 673% from a year ago. During the quarter, the beef processing margin averaged $105 per head, down 37.1% from a year ago. Tight cattle supplies and increased live cattle costs are compressing margins for the segment.

The pork segment is also under pressure with operating profits expected at $22.9 million for the quarter with an operating margin of 1.5%. The pork processing margins totaled $23.90 per head for the quarter, down 6.3% from a year ago. Tyson also closed a pork plant in Iowa during fiscal 2024 and still has loss write-offs to offset profits.

Equity analysts with Morningstar gave Tyson Foods an “uncertainty” rating.

“We forecast meager long-term sales growth for beef sales due to slow herd recovery and health concerns leading consumers to eat other proteins,” said Kristoffer Inton, a strategist at Morningstar.

Analysts with Stephens Inc. recently resumed coverage of Tyson Foods giving shares an equal-weight or neutral rating given challenges in the beef segment that are expected to continue for at least the next year. Stephens expects quarterly earnings per share of 67 cents and $1.91 for the year. The target price prediction by Stephens for Tyson Foods in one year is $57.

Shares of Tyson Foods (NYSE: TSN) closed the quarter at $59.18 per share, up 7.25% over the past year. The stock closed Wednesday (Nov. 6) at $58.90, down 10 cents on the day. Over the past 52 weeks, the stock has traded between $45.13 and $66.88.