Tyson Foods reported third-quarter fiscal 2014 results before markets opened Monday. The food processing company posted adjusted earnings per share (EPS) of $0.75 on revenues of $9.68 billion. In the same period a year ago, the company reported EPS of $0.69 on revenues of $8.73 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.78 and $9.47 billion in revenues.
Tyson provided an update its fiscal 2014 outlook and a first look at its outlook for 2015. Sales are forecast at $38 billion, rising to $42 billion in 2015 as the company integrates Hillshire Brands. Without further comment, the company said its 2015 EPS goal is to increase 2014 EPS by at least 10%. The company did not say what its 2014 EPS estimate is, but the consensus estimate is $2.91, implying 2015 EPS of at least $3.20. The current consensus estimate for next year is $3.16.
The company expects production of domestic chicken, beef, pork and turkey products to increase by 1% in 2015 from 2014 levels. The increase is expected to lower Tyson’s input costs next year. The $8.7 billion acquisition of Hillshire Brands is expected close before September 27.
Tyson’s CEO said:
Overall, our results were in line with our expectations. … We are nearing the end of what looks to be the best year in our company’s history. We’re looking forward to closing on the Hillshire acquisition before the end of our fourth quarter, and we’re excited about combining the protein industry’s best marketing and operations talent into one team.
Tyson announced last week that it will close three of its plants and the firm said Monday morning that it is selling its Brazilian and Mexican operations for $575 million. The company clearly plans to focus on the packaged foods business it acquired with Hillshire Brands, and after paying a small fortune for the firm Tyson had better make the acquisition pay off.
Shares have traded in a 52-week range of $26.87 to $44.24. Thomson Reuters had a consensus analyst price target of $43.75 before this report.
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