ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Tyson Foods beats profit estimates

Tyson Foods Inc say that quarterly profits beat Wall Street estimates and projected the meat company could reap significant gains from an incurable hog disease spreading across Asia.

6 May 2019, at 2:27pm

Tyson, which sells beef, pork and chicken, said all proteins could benefit from outbreaks of African swine fever. The disease is fatal to pigs but harmless in humans and has been detected in China, Vietnam, Cambodia and other countries.

China is expected to ramp up imports of pork from the United States, Europe and Brazil to compensate for millions of pigs killed in its outbreak.

This could begin to benefit Tyson starting late this fiscal year, CEO Noel White said in a statement.

"African swine fever has the potential to impact the global protein industry on a level that we have never experienced," Tyson CEO Noel White said in a statement.

A decrease in global pork supplies would boost Tyson's pork business, while its chicken and beef units could benefit as consumers look for alternatives to higher-priced pork, White said.

In China, up to 200 million pigs could be culled or die due to African swine fever, according to Rabobank.

"Tyson should soon start to benefit from strengthening global wholesale prices for pork as demand from China escalates," Bernstein analysts said in a note before Tyson reported earnings.

Profits in the quarter ended 30 March benefited from higher sales of Tyson's beef and prepared foods segment.

The maker of Ball Park hot dogs and Jimmy Dean sausages said average prices for beef rose 2.3 percent in the quarter, while those for pork fell 8.3 percent despite a 1 percent rise in volume of sales.

Average prices of chicken were down 11 percent in the quarter.

"The chicken segment is poised for improvement following what we believe are its margin lows for the year," White said.

Net income attributable to the company rose to $426 million, or $1.17 per share, in the second quarter ended 3 March, from $315 million, or 85 cents per share, a year earlier.

Excluding items, the company earned $1.20 per share, beating the average analysts' estimate of $1.14 per share.

Tyson's quarterly sales rose 6.9 percent to $10.44 billion. Analysts on average had expected $10.29 billion, according to IBES data from Refinitiv.

During the weekend, Tyson expanded a recall of frozen chicken strips after more consumers found fragments of metal in some products.