In a press release dated February 5th Tyson Foods Inc. (TSN) announced results for the 1st quarter of FY 2024 ending December 30th 2023. TSN posted lower revenue than the $13,457 anticipated but was higher on adjusted earnings ($0.69 vs. $0.40).
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)
|
First Quarter Ending
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Dec. 30th 2023
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Dec. 31st 2022
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Difference (%)
|
|
Sales:
|
$13,319,000
|
$13,260,000
|
+0.5
|
|
Gross profit:
|
$823,000
|
$968,000
|
-14.9
|
|
Operating income (loss):
|
$231,000
|
$467,000
|
-50.3
|
|
Pre-tax income (loss)
Net income (loss)
|
$161,000
$114,000
|
$434,000
$320,000
|
-62.9
-64.4
|
|
Diluted GAAP earnings per share
Adjusted earnings per share
|
$0.30
$0.69
|
$0.88
$0.85
|
-65.9
-18.8
|
|
Gross Margin (%)
|
6.2
|
10.0
|
-38.0
|
|
Operating Margin (%)
|
1.7
|
4.8
|
-64.6
|
|
Profit Margin (%)
|
0.9
|
3.3
|
-72.7
|
|
Long-term Debt and other liabilities:
|
$9,984,000
|
$9,189,000
|
+8.7
|
|
12 Months Trailing:
|
|
|
|
|
Return on Assets (%)
|
0.9
|
|
|
|
Return on Equity (%)
|
-3.4
|
|
|
|
Operating Margin (%)
|
-1.2
|
|
|
|
Profit Margin (%)
|
-1.2
|
|
|
|
Total Assets*: Dec. 30th ‘23/Dec. 31st 2022
|
$36,748,000
|
$36,251,000
|
+1.4
|
|
Intraday Market Capitalization Feb 5th 2024
|
$20,020,000
|
|
|
* Goodwill and intangibles 43.1 percent of total assets
52-Week Range in Share Price of TSN: $56.32 to $61.20. 50-day Moving average, $52.36
Market Close: Friday February 2nd $56.30. Monday February 5th post release, $60.47.
Forward P/E 27.5 Beta 0.8
The Chicken Segment attained sales of $4,033 million ($4,263 million in Q1 FY 2023) representing 30.2 percent of Company revenue. GAAP operating income attained $177 million in Q1 representing 76.7 percent of net Company operating income. Operating income in Q1 FY 2022 was $69 million representing 14.8 percent of net Company income. For the Chicken Segment the report stated:- “The USDA projects chicken production will be flat in FY 2024”. Anticipated adjusted operating income for the segment was forecast at $500 to $700 million for FY 2024.
For comparison among Tyson Foods’ business segments the adjusted operating income (loss) in Q1 2024 were respectively:- Pork, $39 million; Beef, $(206) million; Prepared Foods $243 million and International $(22) million.
In commenting on results Donnie King, president and CEO stated “Our team executed well in the quarter and delivered tangible results, including our third sequential quarter of adjusted operating income growth," He added, "We saw the benefits of our diverse protein portfolio and realization of operational efficiencies from the strategic decisions we made in the past year."
King opined, "Although we still have work to do, I am pleased with our first quarter results and am confident we are on the right path to deliver long-term shareholder value," He concluded, "Going forward, we will continue to prioritize our liquidity and financial health, our focus on operational excellence, and our relentless pursuit to win with customers and consumers."
Guidance for FY 2024 included Revenue unchanged from FY 2023. Adjusted operating income for the Company was stated to be $1.0 to $1.5 billion. Capital expenditure was reduced to $1.0 to 1.5 billion. In the Q2 2013 report Tyson Foods projected $1 billion in savings from the “Productivity Program” by the end of 2024 although this prediction was not confirmed as a quantitative value in the most recent quarterly report but was alluded to.
Moody’s recently lowered the outlook for Tyson Foods but the credit rating was not changed at Baa2, slightly above ‘junk’ status. The Company has $1.25 billion maturing in August 2024. Net interest will amount to $400 million n FY 2024.