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Tyson Foods Beat Earnings Estimates by 29% in Fiscal 1Q16

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Earnings rose 49%

Tyson Foods (TSN) reported its financial results for fiscal 1Q16 on February 5. The company recorded adjusted EPS (earnings per share) of $1.15 for fiscal 1Q16. EPS rose by a huge margin of 49% compared to EPS of $0.77 in fiscal 1Q15. The company’s EPS surpassed estimates by 29%.

In fiscal 2015, Tyson Foods (TSN) showed less growth in earnings. In fiscal 4Q15, the company reported EPS of $0.83. EPS fell 5% year-over-year. Tyson Foods missed earnings estimates in the last two quarters of fiscal 2015. They were short by 16% and 8% in fiscal 3Q15 and 4Q15, respectively.

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Fiscal 2016 EPS guidance

The company has raised its fiscal 2016 EPS guidance to $3.85–$3.95 due to its strong results this quarter and a positive outlook for fiscal 2016. Analysts who follow the company are expecting it to grow earnings at an average annual rate of 11% over the next five years. Analysts are forecasting a rise in earnings this year of 24.4% over last year. Analysts expect earnings growth next year of 5.4% over this year’s forecast earnings.

Peers’ earnings

Tyson Foods’ peers in the food and packaging industry include Hormel Foods (HRL), Flowers Foods (FLO), and Pilgrim’s Pride (PPC). They recorded EPS of $0.69, $0.21, and $0.53, respectively, for their last reported quarters. To gain exposure to Tyson Foods, you can invest in the PowerShares DWA Consumer Staples Momentum Portfolio (PSL) and the VanEck Vectors Agribusiness ETF (MOO). They both invest 7.1% of their holdings in Tyson Foods.

Series overview

In this series, we’ll further discuss Tyson Foods’ fiscal 1Q16 performance, its segmental performance, and its outlook for 2016. We’ll also look at Tyson Foods’ and its peers’ moving averages, the stock’s reaction to the earnings release, and analysts’ recommendations for the stock after the earnings release.

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