Tyson Foods Inc. this week released financial results for its third quarter ended July 1, 2017. The company posted earnings per share on a generally accepted accounting principles (GAAP) basis of $1.21, down 3% from last year, and on an adjusted basis of $1.28, up 6% from last year. Both GAAP and adjusted operating income were lower than the same period last year, at $697 million and $756 million, respectively. However, GAAP operating income for the first nine months of the fiscal year, at $2.25 billion, was slightly higher than the same period last year.
“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 the third quarter of 2016, and every segment delivered volume growth behind a strong start to grilling season and new product innovation,” Tom Hayes, president and chief executive officer of Tyson Foods, said.
According to Hayes, the Beef and Pork segments were very strong performers in the third quarter and continued generating cash to fuel investments in Tyson’s value-added Chicken and Prepared Foods businesses.
“Volume growth in our Core 9 retail and Focus 5 foodservice businesses again outpaced the industry as we built momentum with customers by satisfying consumer appetites for value-added protein and fresh foods,” he said.
The team also worked quickly to complete the acquisition of AdvancePierre in June, Hayes said, adding that the integration is well underway.
“We're collaborating as one team and finding rich opportunities for improvement in agility, revenue growth management and innovation to accelerate the top line. The addition of AdvancePierre will further our leadership position in prepared foods as we capitalize on the fast-growing convenience store channel and the fresh retail perimeter across all day parts,” Hayes said.
Given the early success of the company’s integration efforts, cumulative net synergies exceeding $200 million are now expected within three years.
Hayes said Tyson is nearing the end of a record year of earnings per share and operating income and looks forward to fiscal 2018 “with great enthusiasm.”
“We anticipate delivering another record year through differentiated capabilities, exceptionally strong brands and disciplined execution,” he said.
Strong global demand for protein and a superior focus on the fundamentals will contribute to a favorable operating environment in Tyson’s Beef and Pork segments.
In the chicken segment, the company will build its business through continued capacity expansion of "no antibiotics ever" and organic products, innovation and strong support of the Tyson brand.
In the Prepared Foods segment, Hayes said the company continues to strengthen the business through improved execution in foodservice operations, on-trend protein innovation and the integration of AdvancePierre.
“Tyson Foods is positioned to lead consumer fresh goods through our unique capabilities. We bring together fresh food production and distribution, deep culinary expertise and consumer demand generation, along with number-one brands and unmatched scale,” he said. “At the same time, we operate with agility and are laser focused on creating value for our shareholders. This is an exciting time at Tyson Foods as we build a powerful engine to deliver consistent, profitable growth over time.”