Tyson Foods Posts 3Q17 Results, Anticipates Record Year
- Sally Grimes – Group President, Prepared Foods
- Doug Ramsey – Group President, Poultry
- Noel White – Group President, Fresh Meats (Beef and Pork) and International
- Scott Rouse – Chief Customer Officer
- Mary Oleksiuk – Chief Human Resources Officer
- Scott Spradley – Chief Technology Officer
- David Van Bebber – General Counsel
- Dennis Leatherby – Chief Financial Officer
- Justin Whitmore – Chief Sustainability Officer
As Tyson Foods reported an increase in operating income and earnings for the third quarter, net income during that period fell approximately 8% to $447 million for the Springdale, Arkansas, USA-headquartered company. Profit dropped 22% in the chicken segment, where operating margins slipped from 13.9% to 10.4%.
Solid results were nonetheless logged in three of four business segments on a Generally Accepted Accounting Principles (GAAP) basis, and in all four segments on an adjusted basis, thus achieving operating margins at or above their normalized ranges.
Fiscal 3Q17 sales of $9.9 billion topped Wall Street analysts’ expectations of $9.5 billion, thanks to a combination of overall growth and higher pricing. The company now anticipates that total sales will exceed $38 billion this fiscal year, up from an initial prediction of just under $37 billion.
“Our total net sales grew 4.8% compared to third quarter of 2016, and every segment delivered volume growth behind a strong start to the grilling season and new product innovation,” said President and CEO Tom Hayes. “The beef and pork segments were very strong performers in the third quarter, and continued generating cash to fuel investments in our value-added chicken and prepared foods businesses.”
The company’s stronger-than-expected quarterly results sent its stock price up 5% to almost $67 on August 8, but slipped to just over $65 (-2.81%) when the New York Stock Exchange closing bell rang the following day.
Tyson executives are optimistic about the future, as appetites for chicken products in North America and around the world remain robust. Volume sales of chicken increased 1.6% during the third quarter that ended on July 1, while average prices were up 2.9%. During the same period beef and pork prices advanced 5.3% and 3.3%, respectively, as sales volumes rose less than 1% in each segment.
"What we are focused on is making sure our supply meets our demand, and we're having a challenge right now," said Hayes. “We're nearing the end of a record year of earnings per share and operating income, and we’re looking ahead to fiscal 2018 with great enthusiasm. We expect strong global demand for protein and superior focus on the fundamentals will contribute to a favorable operating environment in our beef and pork segments.”
The president and chief operating officer continued: “In our chicken segment, we will build our business through continued capacity expansion, No Antibiotics Ever and organic products, innovation and strong support of the Tyson brand.”
Streamlined Executive Team
Meanwhile, the company has announced implementation of a streamlined management structure designed “to enable faster, better, decisions.”
Group presidents have been selected to lead Tyson’s four business segments end-to-end. Each reports directly to Hayes and is responsible for growth strategy, execution and developing teams in all product categories and customer channels that their segments serve.
The executives named to oversee the businesses include:
Other executives who will continue to report to Hayes are: