In a press release dated August 5th Tyson Foods Inc. (TSN) announced results for the 3rd quarter of FY 2024 ending June 29th 2024. TSN posted higher adjusted earnings ($0.87) than consensus estimates ($0.67)
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)
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Third Quarter Ending
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June 29th 2024
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July 1st 2023
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Difference (%)
|
|
Sales:
|
$13,353,000
|
$13,314,000
|
+1.6
|
|
Gross profit:
|
$878,000
|
$677,000
|
+29.7
|
|
Operating income (loss):
|
$341,000
|
$(350,000)
|
+197.4
|
|
Pre-tax income (loss)
Net income (loss)
|
$253,000
$191,000
|
$(426,000)
$(417,000)
|
+139.6
+145.8
|
|
Diluted GAAP earnings per share
|
$0.54
|
$(1.18)
|
+145.8
|
|
Gross Margin (%)
|
6.6
|
5.1
|
+29.4
|
|
Operating Margin (%)
|
2.6
|
-2.6
|
+200.0
|
|
Profit Margin (%)
|
1.4
|
-3.2
|
+143.8
|
|
Long-term Debt and other liabilities:
|
$11,402,000
|
$9,189,000
|
+24.1
|
|
12 Months Trailing:
|
|
|
|
|
Return on Assets (%)
|
1.4
|
|
|
|
Return on Equity (%)
|
-3.3
|
|
|
|
Operating Margin (%)
|
3.1
|
|
|
|
Profit Margin (%)
|
-1.2
|
|
|
|
Total Assets* June 29th ‘24/Sep.30th 2023
|
$37,732,000
|
$36,251,000
|
+4.1
|
|
Intraday Market Capitalization May 6th 2024/March 31st2023
|
$21,800,000
|
$18,150,000
|
+20.0
|
* Goodwill and intangibles 41.7 percent of total assets
52-Week Range in Share Price of TSN: $44.94 to $63.87. 50-day Moving average, $57.73
Market Close: Friday August 2nd $61.24. Monday August 5th Open post release, $62.29.
Forward P/E 16.7 Beta 0.7
The Chicken Segment attained sales of $4,076 million ($4,212 million in Q3 FY 2023) representing 30.5 percent of Company revenue. GAAP operating income attained $244 million in Q3 representing 71.5 percent of net Company operating income. Operating loss in Q2 FY 2023 was $(314) million. For the Chicken Segment the report stated:- “The USDA projects chicken production will be flat in FY 2024”. Anticipated adjusted operating income for the segment was forecast at $850 to $950 million for FY 2024. Improvement in the Chicken Segment is attributed to lower feed cost 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 Q3 2024 were respectively:- Pork, $(62) million; Beef, $(69) million; Prepared Foods $203 million and International & Other $25 million.
In commenting on results Donnie King, president and CEO stated, "Our disciplined actions and focus on the fundamentals have resulted in a positive turnaround of our business," He added "In Q3, we delivered the highest adjusted operating income in the last seven quarters while also generating strong free cash flow. Looking ahead, we will continue to strive to be best-in-class operators, drive efficiencies, value-up our portfolio, win with customers and consumers, and be disciplined in our capital deployment."
Improved Q3 earnings raised TSN on a sharply down market.The investors’ call stressed a ‘positive turnaround’ in Q3.
Guidance for FY 2024 included Revenue unchanged from FY 2023. Adjusted operating income for the Company was increased $100 million to a midpoint of $1.7 million with Prepared Foods contributing $850 to $950 million. Capital expenditure was projected at $1.2 to $1.3 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.