Tyson Foods Inc. of Springdale on Monday reported sharply higher year-over-year third-quarter net income, citing strong sales in its chicken and beef segments and higher retail prices.
Net income rose to $249 million from $76 million for the same period a year ago. Earnings per share rose to 68 cents from 50 cents. Adjusted net income per share from continuing operations was 69 cents. The company generated record sales of more than $8.7 billion.
“As expected, we are delivering robust results in the second half of our fiscal year,” Donnie Smith, Tyson president and chief executive officer, said in the earnings release. “We produced strong earnings of 69 cents per share while investing in our people, processes and new businesses and continuing to buy back stock. Our chicken segment achieved record operating income and our beef segment rebounded to generate solid returns.”
“We see a tremendous amount of opportunity in our business,” Smith said. “I am very proud of the team because I’m seeing good long term decision-making to sustain us in the future, and that gives me confidence.”
Analysts polled by FactSet expected earnings of 60 cents per share.
Revenue for the quarter rose 11 percent to $8.73 billion from $8.26 billion a year ago.
Timothy Ramey, analyst with D.A. Davidson & Co., said in a research note that “this was a triumph of a quarter for Tyson and the company is projecting strong improvement ahead. Management likes the tone of the business and the position that Tyson occupies. We will see better margins in chicken and stronger exports in beef.”
“This is a wonderful time for Tyson and the best shape this company has been in in 15 years in our opinion,” Ramey said.
The firm raised its projected Tyson earnings-per-share forecast for fiscal year 2013 to $2.20 from $1.95 and pushed its fiscal year 2014 projection up 10 cents to $2.60. Davidson has a buy rating on Tyson’s stock, with a 12- to 18-month price target of $40 and a five year price target of $50.
Other third-quarter highlights that Tyson noted in its release included record chicken segment earnings of $220 million, a rebound in the beef segment with earnings of $114 million and the repurchase of 4 million shares of the company’s stock for $100 million.
Tyson’s stock closed Monday at $29.69 per share, up $1.18 or 4.14 percent, in trading on the New York Stock Exchange. The stock has traded between $14.07 and $29.85 in the past year.
Business, Pages 23 on 08/06/2013