Tyson Foods’ net income rose 36 percent to $537 during the fourth quarter of the 2018 fiscal year.
The diversified protein company, in a year that included both acquisitions and divestitures, saw a small decline in its overall sales, while its chicken segment saw sales increase.
“Tyson Foods produced solid earnings in fiscal 2018, demonstrating the strength of our differentiated portfolio and diversified business model,” Tyson Foods CEO Noel White stated in a press release, issued on November 13. “We exceeded our revised guidance due to a strong finish in the fourth quarter in the beef and pork segments. Prepared foods drove margin expansion, while the chicken segment closed the gap from earlier in the year with increased promotional activity.
Chicken segment performance
Net sales for Tyson Foods in the fourth quarter, dropped by about $146 million to $10 billion on a year-over-year basis, but sales for the company’s chicken segment rose from $3.04 billion to $3.12 billion.
The increase in sales volume was primarily due to incremental volume from acquisitions. Tyson Foods’ acquisition of Tecumseh Poultry closed in June 2018 and therefore was not a factor when figuring financial results of the 2017 fiscal year.
The company noted that average sales prices decreased for the fourth quarter of FY 2018 due to sales mix changes and price increases associated with cost inflation, partially offset by reduced average sales prices in the fourth quarter of FY 2018.
The segment’s operating income decreased due to increased labor, freight and growout expenses, as well as increased costs for feed ingredients.
Keystone Foods acquisition
While announcing the quarterly financial results, Tyson Foods also gave an update on its pending acquisition of Keystone Foods, which it initially announced in August. That transaction is expected to close in the first quarter or early in the second quarter of the 2019 fiscal year, pending customary closing conditions and regulatory approvals.
However, Tyson Foods cautioned that “there can be no assurance that the acquisition will close at such time.”
