Tyson Ends a Clucking Record Year with Earnings Beat

Andrew Klips  |

Food processor Tyson Foods Inc. (TSN) is ahead in Monday trading after reporting record growth in the last fiscal year as fourth-quarter profits rose 23 percent thanks to higher prices and demand for its products.

For the quarter ended September 28, the Springdale, Arkansas-based company reported revenue of $8.89 billion, up 7 percent from $8.32 billion in the fiscal fourth quarter last year.  Net income for the quarter was $261 million, or 70 cents per share, compared to $185 million, or 57 cents per share, in the year prior quarter.

Wall Street was expecting profits of 62 cents per share on revenue of $8.98 billion.

Sales of Tyson’s chick climbed from $2.96 billion in Q4 2012 to $3.16 billion last quarter. The beef segment also saw rising revenue with year-over-year growth of $323 million to $3.75 billion for the quarter.  Pork sales rose from $1.32 billion to $1.4 billion on higher sale prices as balancing of supply resulted in lower volumes.  Sales of prepared goods improved  more than 5 percent from $805 million to $881 million. 

Operating income for the quarter rose by 18 percent to $416 million.

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Tyson president and chief executive Donnie Smith summed it up quite simply by saying in a statement today, "We had a great fourth quarter, and 2013 was the best year in company history in terms of record sales and earnings per share.The company achieved these results while buying back $550 million in stock, paying more than $100 million in dividends, continuing to build out operations in China and growing our prepared foods business through acquisitions and by entering new product categories.”

Last week, the Tyson board increased the quarterly dividend to 7.5 cents per Class A share from a previously announced 5 cents per share.  During the latest quarter, Tyson re-bought 9.9 million shares for an aggregate amount of $300 million. 14.2 million shares are still authorized to be repurchased under the current approved plan.

The company nailed the high end of its full-year growth projection of 4 percent.

For the complete fiscal year, revenue increased to an all-time high of $34.37 billion, surpassing last year’s $33.06 billion. Adjusted net income swelled to $778 million, or $2.22 per share, versus $583 million, or $1.91 per share, in fiscal 2012.

Looking ahead at the new fiscal year, Tyson expects revenue to rise to $36 billion, mostly because of continuing growth in the chicken and prepared foods segments.  The forecast exceeds the $35.7 billion in sales that analysts were expecting.

Shares of TSN have moved ahead by 1.4 percent in Monday afternoon action to $29.18, although they continue to meet some heavy resistance in the area of $30 per share.  So far in 2013, shares have risen about 50 percent through Friday’s close.

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