Tyson Foods beats by $0.09, reports revs in-line; sees overall domestic protein production up ~1%
Reports Q1 (Dec) earnings of $0.72 per share, $0.09 better than the Capital IQ Consensus Estimate of $0.63; revenues rose 4.7% year/year to $8.76 bln vs the $8.72 bln consensus; co repurchased 4.6 mln shares for $150 mln.
In FY14, 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.
Chicken -- We expect domestic chicken production to increase around 3% 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 ~$600 million. Many of our sales contracts are formula based or shorter-term in nature, but there may be a lag time for price changes to take effect. Due to the relative value of chicken compared to other proteins, we believe demand will remain strong in fiscal 2014. We believe our Chicken segment will be in or above its normalized range of 5.0%-7.0% for fiscal 2014.
Beef -- We expect to see a reduction of industry fed cattle supplies of 2-3% in fiscal 2014 as compared to fiscal 2013. Although we generally expect adequate supplies in regions we operate our plants, there may be periods of imbalance of fed cattle supply and demand. For fiscal 2014, we believe our Beef segment's profitability will be similar to fiscal 2013, but could be below its normalized range of 2.5%-4.5%.
In FY14, 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.
Chicken -- We expect domestic chicken production to increase around 3% 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 ~$600 million. Many of our sales contracts are formula based or shorter-term in nature, but there may be a lag time for price changes to take effect. Due to the relative value of chicken compared to other proteins, we believe demand will remain strong in fiscal 2014. We believe our Chicken segment will be in or above its normalized range of 5.0%-7.0% for fiscal 2014.
Beef -- We expect to see a reduction of industry fed cattle supplies of 2-3% in fiscal 2014 as compared to fiscal 2013. Although we generally expect adequate supplies in regions we operate our plants, there may be periods of imbalance of fed cattle supply and demand. For fiscal 2014, we believe our Beef segment's profitability will be similar to fiscal 2013, but could be below its normalized range of 2.5%-4.5%.