Tyson Foods started its 2017 fiscal year off on a strong note, seeing its net income for the first quarter rise from $461 million to $593 million.
The company announced its quarterly results on February 6.
Other highlights for the quarter included
- Record earnings per share of $1.59, a 38 percent increase
- Record operating income of $982 million, an increase of 27 percent
- Total Company sales volumes increased 2.4 percent
- Record operating cash flows of over $1.1 billion
- Record pork segment operating margin at 19.7 percent
“The year is off to the best start in company history with record earnings, record operating income and record cash flows,” said Tom Hayes, president and CEO of Tyson Foods. “Return on sales for each operating segment was in or above the normalized range. The tremendous returns generated in the beef and pork segments are providing fuel for growth in our value-added chicken and prepared foods segments.”
With the strong beginning to fiscal year 2017, Hayes stated that the company appears to be on a path toward what it expects to be a fifth straight year of record results.
Sales volume for Tyson Foods’ chicken segment increased as a result of better demand for our chicken products, partially offset by a decrease in rendered product sales. Average sales price increased as a result of sales mix changes which offset general market price declines. Operating income decreased due to increased marketing, advertising and promotion spending and higher operating costs which included $23 million of compensation and benefit integration expense. Feed costs decreased $20 million during the first quarter of fiscal 2017.
Sales volume for Tyson’s pork segment increased due to strong demand for our pork products and increased exports. Live hog supplies increased, which drove down livestock cost and average sales price. Operating income increased as the company maximized its revenues relative to the live hog markets, partially attributable to stronger export markets and operational and mix performance, which were partially offset by higher operating costs.
Prepared foods segment
Sales volume for the prepared foods segment increased due to improved demand for prepared foods products. Average sales price decreased primarily due to a decline in input costs of approximately $100 million, partially offset by product mix changes. Operating income decreased due to higher operating costs at some Tyson facilities, increased marketing, advertising and promotion spend and $22 million of compensation and benefit integration expense. Additionally, Prepared Foods’ operating income was positively impacted by $127 million in synergies, of which $32 million was incremental synergies in the first quarter of fiscal 2017 above the $95 million of synergies realized in the first quarter of fiscal 2016. The positive impact of these synergies to operating income was partially offset with investments in innovation, new product launches and supporting the growth of Tyson brands.