In a press release dated May 6th Tyson Foods Inc. (TSN) announced results for the 2nd quarter of FY 2024 ending March 30th 2024. TSN posted lower revenue than the $13,100 anticipated but was higher on adjusted earnings ($0.62 vs. $0.39).
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)
|
Second Quarter Ending
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March 30th 2024
|
April 2nd 2023
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Difference (%)
|
|
Sales:
|
$13,072,000
|
$13,133,000
|
-0.5
|
|
Gross profit:
|
$866,000
|
$527,000
|
+64.3
|
|
Operating income (loss):
|
$312,000
|
$(49,000)
|
+736.7
|
|
Pre-tax income (loss)
Net income (loss)
|
$203,000
$145,000
|
$(130,000)
$(91,000)
|
+256.2
+262.6
|
|
Diluted GAAP earnings per share
|
$0.41
|
$(0.28)
|
+246.4
|
|
Gross Margin (%)
|
6.6
|
4.0
|
+65.0
|
|
Operating Margin (%)
|
2.4
|
-0.4
|
+700.0
|
|
Profit Margin (%)
|
1.1
|
-0.7
|
+257.0
|
|
Long-term Debt and other liabilities:
|
$11,317,000
|
$9,189,000
|
+23.1
|
|
12 Months Trailing:
|
|
|
|
|
Return on Assets (%)
|
1.2
|
|
|
|
Return on Equity (%)
|
-4.5
|
|
|
|
Operating Margin (%)
|
4.7
|
|
|
|
Profit Margin (%)
|
-1.6
|
|
|
|
Total Assets*:March 30th ‘24/Sep.30th 2023
|
$37,465,000
|
$36,251,000
|
+3.4
|
|
Intraday Market Capitalization May 6th 2024/March 31st2023
|
$22,140,000
|
$21,100,000
|
+4.9
|
* Goodwill and intangibles 42.3 percent of total assets
52-Week Range in Share Price of TSN: $44.94 to $61.71. 50-day Moving average, $57.43
Market Close: Friday May 3rd $61.93. Monday May 6th Open post release, $61.02.
Forward P/E 27.0 Beta 0.8
The Chicken Segment attained sales of $4,065 million ($4,430 million in Q2 FY 2023) representing 31.1 percent of Company revenue. GAAP operating income attained $158 million in Q2 representing 50.5 percent of net Company operating income. Operating loss in Q2 FY 2023 was $(258) million. For the Chicken Segment the report stated:- “The USDA projects chicken production will be up 1.0% in FY 2024”. Anticipated adjusted operating income for the segment was forecast at $700 to $900 million for FY 2024. Improvement in the Chicken Segment is attributed to lower feed cost estimated at $190 million for Q2 and reduced operating expenses with consolidation following closure of six plants in four states.
For comparison among Tyson Foods’ business segments the adjusted operating income (loss) in Q1 2024 were respectively:- Pork, $(1) million; Beef, $(35) million; Prepared Foods $230 million and International $(40) million.
In commenting on results Donnie King, president and CEO stated, “During the second quarter, we continued our positive momentum and made progress on our key initiatives. The strategies we have implemented are delivering tangible results, as evidenced by our return to year-over-year bottom line growth." He added, "Looking to the back half of the year, we will continue to focus on executing the fundamentals and leveraging our multi-protein portfolio. We are energized by our progress to-date and laser-focused on driving long-term value."
Despite improved Q2 earnings TSN fell on negative comments during the investors’ call suggesting headwinds in Q3.
Guidance for FY 2024 included Revenue unchanged from FY 2023. Adjusted operating income for the Company was raised to $1.4 to $1.8 billion with Prepared Foods contributing $850 to $950 million. Capital expenditure was projected at $1.2 to $1.4 billion. In the Q2 2013 report Tyson Foods projected $1 billion in savings from the “Productivity Program” by the end of 2024 although this prediction was not confirmed as a quantitative value in the most recent quarterly report.