Tyson Foods, Inc. (NYSE:TSN) beat earnings this morning, but it apparently wasn’t enough to stop the glut of cut-and-run investors.
TSN stock surged to upward of $75 before profit-takers grappled shares back and forth between the red and black … a curious reaction considering Tyson’s third-quarter earnings grew a whopping 51% year-over-year and the company upped its earnings forecast for the full year.
Let’s take a look at the numbers:
TSN Stock Hits All the Right Notes
On an adjusted basis, Tyson Foods, Inc. posted per-share earnings of $1.21, well above the consensus for $1.06 per share, and revenue of $9.4 billion beat the expected $9.3 billion view. That’s a sales decline of just under 7% YoY, but increased sales of chicken and pork (rising 0.4% and 7.2%, respectively) offset the nearly 15% decline in beef sales.
Tyson Foods CEO Donnie Smith had this to say:
“We produced record third quarter earnings per share, operating income and return on sales. All operating segment results were in or above their normalized operating margin ranges, with the Chicken segment delivering a record 13.9 [percent] return on sales.”
And Tyson expects domestic chicken, pork and beef sales to increase by as much as 3% in fiscal 2017. For the full year, TSN expects $4.40 to $4.50 in EPS, which is up from its previous forecast of $4.20 to $4.30, and well above the Street view for $4.36 per share. The revenue forecast of $37 billion for the full year, however, is just under the consensus for $37.12 billion.
Interestingly enough, the decline in TSN stock after reporting gangbuster earnings could be at least somewhat tied to lowered sentiment in the sector after Dean Foods Co (NYSE:DF) reported earnings that were decidedly less stellar than TSN stock.
It’s also very likely a reaction from profit-takers who view TSN stock, trading at 20 times trailing earnings, as overvalued compared to the industry as the stock brushes shoulders with all-time highs.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
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