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Tyson Foods Beats Q3 Earnings Estimates, Stock Jumps

PART:
1 2 3 4 5
Part 2
Tyson Foods Beats Q3 Earnings Estimates, Stock Jumps PART 2 OF 5

What Drove Tyson Foods’ Fiscal 3Q17 Earnings per Share Beat

EPS surpassed estimate

Tyson Foods (TSN) reported better-than-expected bottom-line results for fiscal 3Q17 on August 7.  Tyson Foods’ adjusted EPS (earnings per share) of $1.28 exceeded analysts’ estimate of $1.18 and rose 5.8% YoY (year-over-year). However, on a reported basis, its EPS fell 3% YoY to $1.21.

In comparison, Pilgrim’s Pride (PPC)—which reported its 2Q17 results on August 2—saw significant improvement in its adjusted EPS and beat analysts’ expectation on the back of strong demand in the local market. As for Hormel Foods (HRL) and Sanderson Farms (SAFM), analysts expect their bottom lines to mark a YoY improvement in the upcoming quarter due to the continued consumption growth of protein-rich products.

What Drove Tyson Foods’ Fiscal 3Q17 Earnings per Share Beat

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What led to EPS growth?

As we noted in the previous part of this series, Tyson Foods witnessed volume improvements across all its segments, thanks to increased demand that boosted bottom-line growth. Plus, higher average selling prices further supplemented EPS growth.

Tyson Foods’ management projects its fiscal 2017 adjusted EPS to be $4.95–$5.05, representing a rise of 13.0%–15.0% YoY.  Note that the fiscal 2017 bottom-line guidance excludes the benefits from the AdvancePierre acquisition. For fiscal 4Q17, adjusted EPS is expected to be in the range of $1.07–$1.17.

The company expects increased demand for chicken, beef, and pork to continue to drive its bottom-line growth. Meanwhile, a favorable product mix and higher pricing should also boost bottom-line growth.

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