Tyson Foods reported a profit for the third-quarter that declined 7.6 percent from last year, while quarterly net sales grew 4.8%. Both adjusted earnings per share and quarterly Sales topped analysts' expectations.
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"Our team delivered solid results in our third quarter with three of four segments on a GAAP basis and all four segments on an adjusted basis achieving operating margins in or above their normalized ranges.
"Our total net sales grew 4.8% compared to third quarter of 2016, and every segment delivered volume growth behind a strong start to grilling season and new product innovation," said Tom Hayes, president and chief executive officer of Tyson Foods.
For 2017, the company now expects adjusted earnings per share to be in the range of $4.95-$5.05, representing a 13% increase from adjusted earnings per share of fiscal 2016.
Previously, the company expected adjusted earnings of $4.90-$5.05 per share for 2017. Analysts expect annual earnings of $5.01 per share.
The company now expect fiscal 2017 sales to be above $38 billion as it grow sales volume across each segment. Analysts expect revenue of $37.26 billion for 2017.
For fiscal 2018, it expects sales to grow to approximately $41 billion which excludes the revenue of the three non-protein businesses held for sale. Analysts expect revenue of $38.25 billion for 2018.
Net income attributable to the company for third-quarter declined 7.6 percent to $447 million from last year's $484 million, with earnings per share decreasing to $1.21 from $1.25 per share in the prior year.
Adjusted net income per share for the third-quarter was $1.28 compared to $1.21 per share in the prior year.
Sales for the quarter grew to $9.85 billion from $9.40 billion in the prior year. Analysts expected revenue of $9.48 billion for the quarter.
The company's latest acquisition, AdvancePierre contributed about $100 million of revenue in the third quarter of fiscal 2017 and it anticipates about $350 million of AdvancePierre revenue in the fourth quarter of fiscal 2017.
It expects incremental revenue of $900 million in fiscal 2018 for a total of $1.35 billion in the first full fiscal year as part of operation.
In fiscal 2018, USDA indicates domestic protein production- beef, pork, chicken and turkey- should increase approximately 3%-4% from fiscal 2017 levels, but strong export markets should partially offset the increase.
The company acquired AdvancePierre on June 7, 2017, and expects to realize net synergies in excess of $200 million within three years with the majority of these benefits realized in Prepared Foods segment.
It expects to realize synergies of around $675 million in fiscal 2017 from the Hillshire Brands acquisition as well as profit improvement plan for legacy Prepared Foods business with some incremental synergies expected to be realized in fiscal 2018. ■