Tyson Foods (NYSE: TSN) reported Q4 EPS of $2.30, $0.27 better than the analyst estimate of $2.03. Revenue for the quarter came in at $12.81 billion versus the consensus estimate of $12.66 billion.

OUTLOOK:

For fiscal 2022, the United States Department of Agriculture (“USDA”) indicates domestic protein production (beef, pork, chicken and turkey) should increase slightly as compared to fiscal 2021 levels. The following is a summary of the outlook for each of our segments, as well as an outlook for revenues, capital expenditures, net interest expense, liquidity, tax rate and dividends for fiscal 2022.3

Beginning in fiscal 2022, we are launching a new productivity program, which is designed to drive a better, faster and more agile organization that is supported by a culture of continuous improvement and faster decision making. We are targeting $1 billion in productivity savings by the end of fiscal 2024 and $300 million to $400 million in fiscal 2022, relative to a fiscal 2021 cost baseline.

BeefUSDA projects domestic production will decrease approximately 2% in fiscal 2022 as compared to fiscal 2021. We anticipate another strong year with adjusted operating margin between 9% to 11% in fiscal 2022. We expect the first half of the fiscal year will be stronger than the second half as a combination of higher utilization and demand for cattle may result in a narrowing spread.

PorkUSDA projects domestic production will decrease approximately 2% in fiscal 2022 as compared to fiscal 2021. We believe our Pork segment's adjusted operating margin will be 5% to 7% in fiscal 2022.

ChickenUSDA projects chicken production will increase slightly in fiscal 2022 as compared to fiscal 2021. We anticipate an adjusted operating margin at the lower end of 5% to 7% for fiscal 2022 as our adjusted operating margin should achieve this on a run rate basis by the middle of the year resulting in overall stronger performance in the second half of the fiscal year.

Prepared FoodsWe believe our adjusted operating margin will be around 7% to 9% in fiscal 2022. We will remain disciplined in our pricing initiatives to ensure additional inflationary pressures are passed through to customers, while also working diligently to deliver productivity savings to reduce costs.

International/OtherWe anticipate improved results from our foreign operations in fiscal 2022.

RevenueWe expect sales to approximate $49 billion to $51 billion in fiscal 2022.

Capital ExpendituresWe expect capital expenditures of approximately $2 billion for fiscal 2022. Capital expenditures include spending for capacity expansion and utilization, automation to alleviate labor challenges and brand and product innovation.

Net Interest ExpenseWe expect net interest expense to approximate $380 million for fiscal 2022.

LiquidityWe expect total liquidity, which was approximately $4.8 billion at October 2, 2021, to remain above our minimum liquidity target of $1.0 billion.

Tax RateWe currently expect our adjusted effective tax rate to be around 23% in fiscal 2022.

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