Tyson Foods (TSN) Misses Q4 EPS by 21c

Tyson Foods (NYSE: TSN) reported Q4 EPS of $0.96, $0.21 worse than the analyst estimate of $1.17. Revenue for the quarter came in at $9.16 billion versus the consensus estimate of $9.38 billion.

GUIDANCE:

Tyson Foods sees FY2017 EPS of $4.70-$4.85, versus the consensus of $4.98.

“We’re growing where we want to grow by selling more branded, higher margin products. Sales volume was up in our Core 9 product lines at retail and our top tier products in foodservice.

“The Prepared Foods segment had a record margin for the year, while simultaneously driving industry-leading category growth at retail. The Pork segment had a record year as well, while the Chicken segment nearly matched last year’s record margin. The Beef segment is a great turnaround story, producing normalized margins for the year,” Smith said.

“Synergies and profit improvement for the fiscal year totaled $580 million, well exceeding our $500 million target,” Dennis Leatherby, Tyson Foods’ executive vice president and chief financial officer, said.

“Our business generated record cash flows that give us the flexibility to drive long-term shareholder value. Our priorities for capital allocation continue to be investing in our existing businesses, acquiring businesses that support our strategic objectives and returning cash to shareholders through share repurchases and dividends, all while prudently managing our debt profile.

“In fiscal 2016, we repurchased more than 28 million shares of our stock for $1.7 billion. This week the Board of Directors increased the quarterly dividend by $0.075, or 50%, to $0.225 per share. This continues our expectation to increase dividends for Class A shares by at least $0.10 per share annually,” Leatherby said.

“Looking forward, we will continue building this business for long-term, sustainable growth by investing in innovation, consumer insights, our brands, our customer relationships, our facilities and our people,” Tom Hayes, president of Tyson Foods, said. “In addition to allocating $1 billion for capital expenditures in fiscal 2017, we are investing in initiatives such as improved worker safety, food safety, animal well-being, warehouse and distribution optimization and attracting and retaining talent throughout our company. These investments will pay off in the coming years through, among other things, improved costs and reduced turnover.”

“The first seven weeks of fiscal 2017 have been phenomenal as we are off to the best start we have ever experienced. We’re confident we can increase the investment in our business while still growing and delivering another record year with earnings in the range of $4.70-$4.85 per share,” Smith said. “We are in a great position now, and we're positioning ourselves for long-term success.”

For earnings history and earnings-related data on Tyson Foods (TSN) click here.

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