Credit Suisse calls Tyson’s first-quarter results ‘poor in every way’
Biggest beef giant Tyson Foods on Monday reported lower fiscal first-quarter earnings compared to last year, indicating a sharp decline in beef prices and lower demand for pork.
The company reported adjusted earnings per share of $0.85, well below Wall Street estimates — analysts polled by Refinitiv had expected $1.34 per share. Sales rose 2.5% quarterly to $13.26 billion but also fell short of analysts’ estimate of $13.52 billion.
“We ran into some issues in the first quarter,” Tyson CEO Donnie King said in a statement released alongside the results. “Market dynamics and some operating inefficiencies have impacted our profitability.”
|TSN||TYSON FOODS INC.||61.08||-2.95||-4.61%|
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Tyson reported an 8.5% year-on-year decline in beef prices in the first quarter, while operating margins in its largest meatpacking segment fell to 3.5% from 19.1% a year earlier.
Meanwhile, pork sales fell 7.4% year on year while prices rose 1.4%.
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Although Tyson’s chicken prices rose 7.1% in the first quarter, the company cut its operating margin forecast for the segment to 2-4% from 6% to 8%.
Credit Suisse said in a note after the earnings report that the results were “poor all around,” but King was optimistic.
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“We look forward to improving our performance in the second half of fiscal 2023 and beyond as we strive for excellence and work to become best-in-class in our industry,” Tyson’s chief executive said.
Reuters contributed to this report.
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