Post Earnings Coverage as Tyson Earnings Improve 16% and CEO to Step Down

Upcoming AWS Coverage on Hormel Foods Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 30, 2016 / Active Wall St. announces its post-earnings coverage on Tyson Foods, Inc. (NYSE: TSN). The company released its fourth quarter fiscal 2016 and fiscal 2016 results on November 21, 2016. The world’s biggest processor of poultry, pork, and beef reported earnings and revenue numbers that came in below market expectations. The Company also announced that its CEO would be stepping down. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Tyson Foods’ competitors within the Meat Products space, Hormel Foods Corp. (NYSE: HRL), reported on November 22, 2016, its fiscal year 2016 fourth quarter and full year results. AWS will be initiating a research report on Hormel Foods in the coming days.

Today, AWS is promoting its earnings coverage on TSN; touching on HRL. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=TSN

http://www.activewallst.com/registration-3/?symbol=HRL

Earnings Reviewed

For the three months ended on October 01st, 2016, Tyson reported Q4 FY16 earnings of $391 million, or $0.96 per share, from $258 million, or $0.83 per share, in the same period a year ago. The company’s earnings numbers missed analysts’ estimates of $1.16 per share. During Q4 FY16, Tyson’s net sales fell 6% to $9.16 billion from $10.51 billion, which was below analysts’ forecasts of $9.40 billion. The drop in revenue was attributed to a decline in beef, pork and prepared foods sales, which offset better-than-expected chicken sales. During the reported quarter, the company’s sales volume dipped 8.2%, while average sales price fell 5.1%.

For FY16, Tyson reported $36.88 billion in sales compared to $41.37 billion in sales in the year ago period, while earnings totaled $4.39 per share, higher by 39% from earnings of $3.15 per share for FY15. Operating income was also a record at $2.8 billion, representing a 26% increase over adjusted operating income a year ago. The company’s FY16 operating cash flow was a record $2.7 billion.

Segment Details

During Q4 FY16, Tyson’s Chicken segment sales remained almost flat on a y-o-y basis to $2.81 billion. In the Chicken segment, operating income was $220 million with a 7.8% operating margin for the reported quarter. Adjusted volume was down 3.2% due to a planned temporary decrease in production, and average price was up 3.5% as the company focused on selling higher margin products.

Sales in Tyson’s Beef segment for the reported quarter declined 15.1%, compared to the year ago period to $3.477 billion. The segment’s operating income was $139 million in Q4 FY16 with a 4% operating margin. Adjusted volume was down slightly by 0.3% while average sales price declined 14.9% reflecting reduced cattle costs. The company is expecting its beef margins to be at the upper end of its normalized range of 1.5% to 3% in fiscal 2017, reflecting the favorable environment that is expected to continue for some time.

For Q4 FY16, sales in Tyson’s Pork segment grew 1.4% on a y-o-y basis to $1.24 billion driven by a 0.4% increase in sales volume and a 1% rise in average price. Sales at company’s prepared Foods division slipped 1.5% y-o-y at $1.84 billion. Operating income in Q4 FY16 was $133 million, with 7.2% operating margin. Average price was down 3.9% primarily reflecting the pass through of overall lower raw material costs.

CEO Steps Down

In a separate press release, on the same day of its earnings release, Tyson announced that Tom Hayes, President of Tyson Foods, will succeed Donnie Smith as Chief Executive Officer on December 31, 2016. Hayes will continue to serve as President and has been appointed to the Board of Directors, effective immediately. Smith, who has been CEO of Tyson Foods since November 2009, will be available to consult with the Company for a three-year period.

Dividend and Share Repurchase

For FY16, Tyson repurchased more than 28 million shares of stock valued at $1.7 billion and had 40.3 million shares remaining in its authorized program as of October 1, 2016. The company also raised its quarterly dividend last week to $0.225 per class a share. The new dividend is payable on December 15 to shareholders of record as of December 1, 2016. In total, the Company has returned over $1.9 billion to shareholders through share repurchases and dividend during FY16.

Earnings Outlook

Tyson is anticipating FY17 earnings to remain in the range of $4.7 to $4.85, up 7% to 10% y-o-y.

Stock Performance

On Tuesday, November 29, 2016 Tyson Foods’ shares jumped 1.06%, finishing the day at $58.96 with volume of 5.67 million shares exchanging hands by the close of the trading session. For the last twelve months, the stock has gained 18.69%. Furthermore, on a year to date basis, the stock gained 11.28%. The company’s shares are trading at a PE ratio of 13.00 and have a dividend yield of 1.53%.

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