In a press release dated August 8th Tyson Foods Inc. (TSN) announced results for Q3 of FY 2022 ending July 2nd 2022.
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)
|
Third Quarter Ending
|
July 2nd 2022
|
July 3rd 2021
|
Difference (%)
|
|
Sales:
|
$13,495,000
|
$12,478,000
|
+8.7
|
|
Gross profit:
|
$1,611,000
|
$1,620,000
|
-0.6
|
|
Operating income:
|
$1,033,000
|
$1,062,000
|
-2.7
|
|
Pre-tax Income
Net Income
|
$986,000
$753,000
|
$966,000
$753,000
|
+2.1
0
|
|
Diluted earnings per share:
|
$2.07
|
$2.05
|
+1.0
|
|
Gross Margin (%)
|
11.9
|
14.3
|
-16.8
|
|
Operating Margin (%)
|
7.7
|
9.4
|
-18.1
|
|
Profit Margin (%)
|
5.6
|
6.7
|
-16.4
|
|
Long-term Debt and other liabilities:
|
$12,943,000
|
$14,606,000
|
-11.4
|
|
12 Months Trailing:
|
|
Return on Assets (%)
|
10.7
|
|
Return on Equity (%)
|
23.1
|
|
Operating Margin (%)
|
11.7
|
|
Profit Margin (%)
|
7.9
|
|
Total Assets
|
$36,245,000
|
$36,309,000
|
-0.2
|
|
Intraday Market Capitalization August 8th
|
$31,666,000
|
52-Week Range in Share Price of TSN: $69.83 to $100.72. 50-day Moving average, $91.39
Market Close: Friday May 6th $90.85. Open Monday May 9th post-release $94.37.
TSN beat on revenue against an estimate of $13,300 million but adjusted EPS of $1.94 was below expected $1.98.
Forward P/E 11.5 Beta 0.8
The Chicken Segment attained sales of $4,959 million ($4,954 million in Q3 FY 2021) representing 36.7 percent of Company revenue. Operating income was $277 million or 26.8 percent of the Company total (adjusted to $269 million). In Q3 of 2021 operating loss was $(279) million adjusted to $27 million.
For comparison among Tyson Foods’ business segments the adjusted operating incomes were respectively:- Pork, $25 million; Beef, $506 million; Prepared Foods $186 million.
In commenting on results Donnie King, president and CEO stated “We delivered solid results during the third quarter, focusing on operational excellence and aggressive cost management." He added, "The turnaround of our chicken business continues, and we continue to be the market share leader in many of our retail business lines, which include our Tyson, Jimmy Dean, Hillshire Farm and Ball Park iconic brands. We maintained double-digit sales and earnings growth year to date as well as progressing toward our goal of delivering more than $1 billion in recurring productivity savings by the end of fiscal 2024.
"King concluded "I'm optimistic about our ability to win with our team members, win with our customers and consumers and win with excellence in execution."
With regard to the Chicken Segment the company release included:- “Sales volume decreased in the third quarter of fiscal 2022 primarily due to a reduction in volumes related to a fire at a production facility in the fourth quarter of fiscal 2021 and a reduction in outside meat purchases. Average sales price increased in the third quarter of fiscal 2022 due to the effects of pricing initiatives in an inflationary cost environment. Operating income increased in the third quarter of fiscal 2022 primarily due to higher average sales prices, partially offset by the impacts of inflationary market conditions including increased supply chain and labor costs. In the third quarter of fiscal 2022, we experienced $145 million of higher feed ingredient costs and $23 million of net derivative losses as compared to $56 million of net derivative gains in the third quarter of fiscal 2021”.
Guidance for FY 2022 included Revenue between $52 and $54 billion; Operating margin of 5 to 7 percent unchanged from the Q2 report, Savings in cost of production of $400 million in FY 2022 relative to 2021and capital expenditure of $1.9 billion. The Company warned that supply chain issues would impact international operations.