Tyson Foods expected to report healthy gains in quarterly net income - Talk Business & Politics

Tyson Foods expected to report healthy gains in quarterly net income

by Kim Souza (ksouza@talkbusiness.net) 293 views 

Tyson Foods is expected on Monday (Feb. 3) to post first fiscal quarter net income of $313.44 million, with earnings per share of 88 cents, up 27.5% from the 69 cents in adjusted earnings recorded a year ago.

Revenue is forecast at $13.46 billion, which would be up 1% from the year-ago period, according to the consensus estimate of analysts who follow the Springdale-based company.

Pooran Sharma, an analyst at Stephens Inc., expects Tyson to outperform at 94 cents per share in the quarter on improved profitability in the chicken segment. That would offset ongoing losses in the beef segment. He remains neutral on the shares with a target price of $60.

Beef packing processing margins averaged $92.72 per head during the quarter, down from $130.68 per head in the year-ago period, according to Stephens Inc. Industry production was down about 5% from the prior-year period. Live cattle prices increased in the quarter to about $190 per hundredweight. Prices have continued to escalate in 2025 surpassing $205 per hundredweight in January.

Sharma expects Tyson’s beef segment will see an operating loss of $90 million in the quarter, better than the $117 million loss reported a year ago.

“We have slightly lowered our first quarter beef estimate due to moderately worse than expected beef packer margins as cutout value increases were outpaced by cattle price increases during the period. With no signs of heifer retention on the horizon we expect beef supplies to remain pressured over the intermediate to long term,” he said.

Tyson’s chicken business will be profitable with an expected operating income of $325 million, up 69% from a year ago.

“We have slightly raised our first quarter chicken estimate, driven by better-than-expected prices that held steady in the quarter avoiding the typical seasonal pricing dip. We think the tight supply environment persists into the year as solutions to the industry’s breeding flock issues are generally seen as costly and/or long-term in nature. In light of the relative position of beef prices, we think chicken demand should remain strong,” Sharma said.

The U.S. Department of Agriculture reports chicken processing margins averaged 23 cents per pound, compared to 2 cents per pound a year ago. Wholesale prices of boneless chicken breasts average around $1.50 per pound in the quarter, well above the five-year average price. Leg quarter prices averaged 50 cents per pound, up more than 60% from the five-year average. Tyson also benefited from lower grain costs in the quarter for soybean meal and corn which is a boost to operating income, analysts said.

Tyson’s pork segment is expected to report an operating income of $27 million, down from $68 million a year earlier. Sharma said Stephens lowered its pork estimate because lean hog prices outpaced the slightly higher cutout values that led to tighter packer margins. Packer margins averaged $24.33 per pound in the quarter, down from $31.03 in the year-ago period, according to Stephens Inc.

Tyson’s large prepared foods business is expected to report operating income of $259 million, down from $264 million a year ago.

Shares of Tyson Foods (NYSE: TSN) closed Wednesday at $56.60, up 12 cents. Over the past 52 weeks, the shares have traded between $51.16 and $65.88.

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