Tyson Foods beats by $0.01, reports revs in-line; guides FY14 revs above consensus; Jim Lochner, Chief Operating Officer, to retire at end of FY14
Reports Q4 (Sep) earnings of $0.70 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.69; revenues rose 7.0% year/year to $8.89 bln vs the $8.9 bln consensus.
Co issues upside guidance for FY14, sees FY14 revs of $36.0 bln vs. $35.72 bln Capital IQ Consensus Estimate.
"All periods reported reflect a discontinued operation, which was part of our Chicken segment, recognized in fiscal 2013." Chicken - Sales volumes grew due to increased domestic and international production driven by stronger demand for our chicken products. The increase in average sales price in the fourth quarter and 12 months of fiscal 2013 was due to mix changes and price increases associated with higher input costs. Beef - For the fourth quarter of fiscal 2013, sales volume rose as we increased production due to sufficient cattle supply and strong demand for our beef products. Pork - Sales volume decreased as a result of balancing our supply with customer demand and reduced exports. Prepared Foods - Sales volume increased as a result of improved demand for our prepared products and incremental volumes from the purchase of two businesses in fiscal 2013. "Outlook In fiscal 2014, we expect overall domestic protein production (chicken, beef, pork and turkey) to increase ~1% from fiscal 2013 levels. Grain supplies are expected to increase in fiscal 2014, which should result in lower input costs."
The following is a summary of the fiscal 2014 outlook for each of itssegments, as well as an outlook on sales, capital expenditures, net interest expense, debt and liquidity, share repurchases and dividends: Chicken -- We expect domestic chicken production to increase 3-4% in fiscal 2014 compared to fiscal 2013. Based on current futures prices, we expect lower feed costs in fiscal 2014 compared to fiscal 2013 of ~$500 million. Beef -- We expect to see a reduction of industry fed cattle supplies of 2-3% in fiscal 2014 as compared to fiscal 2013. Pork -- We expect industry hog supplies to increase 1-2% in fiscal 2014 and exports to improve compared to fiscal 2013. For fiscal 2014, we believe our Pork segment will be in its normalized range of 6.0%-8.0%. Prepared Foods -- We expect operational improvements and pricing to offset increased raw material costs. In a separate release, the co announced Jim Lochner's decision to retire in September 2014 after a more than 30-year career at Tyson Foods and IBP, inc. Lochner has served since 2009 as the company's chief operating officer and overseen much of the turnaround during the last four years. He is relocating to the company's fresh meats headquarters in Dakota Dunes, South Dakota, where he will support the fresh meats business. Following retirement, Lochner will serve the company in an advisory capacity through the end of 2017. Co also announced the creation of several new leadership positions to support future growth in its domestic and international protein and prepared foods businesses. The move aligns with the company's stated long-term strategy, which is to accelerate growth in the international, poultry and prepared foods arenas through innovation and services while cultivating the best talent in the food industry.