Friday, May 6, 2011

Tyson Foods Inc. (NYSE: TSN): Q2 Earnings Preview 2011

Tyson Foods Inc. (NYSE: TSN) is scheduled to report fiscal second-quarter earnings before the opening bell on Monday, May 9, 2011. Analysts, on average, expect the company to report earnings of 43 cents per share on revenue of $7.52 billion. In the year ago period, the company reported earnings of 46 cents per share on revenue of $6.92 billion. 

Tyson Foods, Inc. and its subsidiaries engage in the production, distribution, and marketing of chicken, beef, pork, prepared foods, and related allied products worldwide. It operates in four segments: Chicken, Beef, Pork and Prepared Foods.

Tyson's recent results indicated that general sales volumes and prices have been strong. In the preceding first quarter, the Springdale, Arkansas based company's net income was $298 million or 78 cents per share, compared to $160 million, or 42 per share. On an adjusted basis, the company earned 75 cents per share in the fourth quarter. Revenue rose 14.8 percent to $7.62 billion from $6.64 billion last year. 

At its last earnings call in February, the company forecast better-than-expected 2011 earnings. Tyson forecast fiscal 2011 earnings to come in comparable to 2010's $2.19 per share, well ahead of analysts' consensus for full-year profits per share of $1.81. For 2011, the company expects overall domestic protein production, comprising chicken, beef, pork and turkey, to increase slightly. Meanwhile, total domestic availability of protein is expected to be down slightly compared to fiscal 2010 due to anticipated growth in exports, which should continue to support pricing. The company expects fiscal 2011 capital expenditures to be approximately $700 million.

Meat producers such as Tyson Foods Inc. and Smithfield Foods Inc. are continuing to rebound from their low recession levels, as demand remains high and the measures they took to increase efficiency during the recession continue to take effect. The growing wealth in Asia has been a boon to the pork industry, as the meat is popular in this part of the world so demand has been strong.

The company has benefited from higher meat prices, operational improvement and top line sales growth. In addition to improved operational performance, Tyson has reduced its debt load significantly. 

Last month, Donnie Smith, president and chief executive officer of Tyson Foods told the Bank of America/Merrill Lynch 2011 Consumer Conference that Tyson is well positioned to handle challenging economic times. Smith said the company's strong balance sheet, focus on execution and recent operational improvements have allowed the company to compete effectively, even in the face of rising input costs. He said that Tyson's Beef and Pork segments are extremely efficient and competitive, while its Chicken segment has improved significantly. Tyson raises the chickens it produces but purchases the cattle and hogs it needs to produce beef and pork."In the past three years, our chicken business achieved $600 million in performance improvements, and we expect an additional $200 million in fiscal 2011," Smith said.

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire