Tyson Foods Beats Profit Estimates After Earnings Report

Tyson Foods, ( TSN ) the largest US meat company by sales, has surpassed Wall Street expectations for second-quarter profit as it begins to reduce costs by shutting some chicken processing plants. The company's adjusted earnings of 62 cents per share for the second quarter were higher than analysts' average estimate of 39 cents. However, Tyson ( TSN ) has been struggling with slowing demand over the last few quarters. Price-conscious customers cut back on expensive purchases and look for affordable options amid high food prices and borrowing costs.

Tyson's second-quarter net sales fell 0.5% to $13.07 billion, compared with estimates of $13.16 billion. Sales in the chicken segment, which struggled with excess supply during 2023, were down 8.3% in the quarter, even though prices fell 2.1%. Volumes dropped by 6.1%. However, volumes at the beef segment, its largest, grew for the first time in five quarters, logging a 2.8% increase. The company's pork segment also saw volumes increase by 2.9%.

The operating margin in Tyson's beef business dropped by 0.7% in the quarter, as the business has grappled with limited U.S. cattle supplies since last year. The company expects total sales to be flat in fiscal 2024, compared with the previous year's $52.88 billion.

Adjusted net income in the three months ended March 30 was 62 cents a share, exceeding even the highest of analyst estimates compiled by Bloomberg. Tyson ( TSN ) is now making $1.4 billion to $1.8 billion in operating income in fiscal 2024, up from a previous forecast range between $1 billion and $1.5 billion. Most of Tyson's second-quarter operating profits came from its prepared foods business.

Technical Outlook
Tyson ( TSN ) Closed Friday's trading session on a clean slate up by 1.76% with a Relative Strength Index (RSI) of 67.97 which is perfect for a good start for the week.