Yahoo Finance Tyson Foods in Fiscal 2Q16: Did Sales Beat Estimates?
Tyson Foods’ Fiscal 2Q16 Earnings and Updated Guidance
Tyson Foods’ revenue declined
In fiscal 2Q16, Tyson Foods (TSN) reported total revenue of $9.2 billion. This was a 8% fall compared to the same quarter in fiscal 2015. Tyson Foods, however, beat the average estimate of $9.0 billion. The drop in revenue was mainly due to continued declines in beef, pork, and chicken prices.
Sales volume grew 2.1% in the second quarter of fiscal 2016. The sales volume results excluded the effect of divestitures of the Mexico operation last year.
Operating profit rose
In fiscal 2Q16, Tyson Foods reported an operating profit of $704 million, an increase of 27% over fiscal 2Q15. The company recorded a higher operating margin of 7.6%, compared to 5.4% in fiscal 2Q15, and operating cash flows of $1.1 billion. All of Tyson Foods’ segmental operating margins were in or above normalized ranges. The Chicken segment’s operating margin was 12.7%, while the Prepared Foods and Pork segments saw operating margins of 10.9% and 11.8%, respectively.
Other key results for fiscal 2Q16
Net income rose to $434 million compared to $311 million in fiscal 2Q15. Gross profit also increased by $194 million in fiscal 2Q16. Tyson Foods showed improved margins in fiscal 2Q16 compared to fiscal 2Q15. The gross, net, and operating margins of 12.9%, 4.7%, and 7.6%, respectively, were ahead of analysts’ expectations.
The company reported an operating cash flow of $1.1 billion in fiscal 2Q16 and spent $355 million on capital expenditures. The company’s net debt was $6.1 billion, and its return on sales hit a record of 7.7%. Its net interest expense was $63 million in fiscal 2Q16, and the diluted shares outstanding were 393 million.
Peers’ revenues
Tyson Foods’ peers in the industry include Campbell Soup Company (CPB), B&G Foods (BGS), and Flowers Foods (FLO). Campbell Soup’s and Flowers Foods’ revenues fell by 1% and 2% in their last respective quarters, while B&G Foods grew revenue by 63% in its last reported quarter.
The PowerShares S&P 500 Low Volatility Portfolio (SPLV) and the PowerShares Dynamic Food & Beverage Portfolio (PBJ) invest 1.1% and 2.6% of their respective portfolios in CPB.
In the next part of this series, we’ll look at the performance of Tyson Foods’ beef segment in fiscal 2Q16.
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