Food Business News - February 10, 2015 - (Page 37)

Company Profile Tyson Foods flying high Chicken business, Hillshire integration going well, but will the company's wings get clipped in 2016? ith its largest business far more profitable and a major integration on track, the top executive of Tyson Foods, Inc. is upbeat on financial prospects for the company's fiscal 2015. "We've set ourselves up for another record year, and we are building momentum that will take us into fiscal 2016," said Donnie Smith, president and chief executive officer. Tyson first-quarter earnings were lifted by dramatically improved margins in its Chicken and Prepared Foods segments. Net income in the first quarter ended Dec. 27, 2014, was $309 million, equal to 77c per share on the common stock, up 22% from $254 million, or 76c per share, during the first quarter of fiscal 2014. Weighted shares outstanding in the quarter grew to 416 million from 354 million, following a share offering in July 2014. W February 10, 2015 Quarterly net sales were $10,817 million, up 23% from $8,761 million. The higher sales reflected the first full quarter of results of Hillshire Brands, acquired by Tyson in August in an $8.7 billion transaction. At least briefly, investors reacted with enthusiasm to the Tyson results. In active New York Stock Exchange trading Jan. 30, Tyson shares opened up $1.28 per share, rising to a new 2015 high of $42. During a down day for the S.&P.500, sentiment darkened quickly, and Tyson closed the day down $1.17, to $39.04. In trading volume that exceeded 10 million shares (versus an average of less than 5 million), the closing price was the lowest for the company since Jan. 5. Operating profits of the Chicken segment in the first quarter rose to $351 million, up 39% from $253 million in the first quarter a year earlier. Operating margins grew by a third to 12.6% from 9.5%. Chicken sales were $2,780 million, up 4.7%, comprising a volume gain of 3.1% and a price increase of 1.5%. Looking forward, Tyson said U.S. chicken production was expanding at a rate faster than anticipated but said robust demand diminished the risk posed by the expanding supply. "While the current U.S.D.A. (U.S. Department of Agriculture) forecast is for a 3% increase in production, recent supply data point to a greater increase in supply," the company said. "Last quarter Ty- son pointed to the 2% to 3% production increase forecast by the U.S.D.A. Tyson believes demand will keep pace with the supply change. While many of Tyson's contracts are formula based and shorter term, the company believes there may Tyson Foods' first-quarter earnings were lifted by dramatically improved margins in its Chicken and Prepared Foods segments. FOODBUSINESS NEWS ® 37

Table of Contents for the Digital Edition of Food Business News - February 10, 2015

Food Business News - February 10, 2015
Hershey continues move into snack categories
Renewed school food fight looming on the horizon
Beverage Business News - Colorful ways to quench a thirst
Table of Contents
Web Contents
Editorial - Oil and currency moves should be seen as threats
McCormick eyes ambitious growth in year ahead
Dunkin’ to debut cold blended beverage platform
Campbell Soup in the midst of reorganizing
The future of shopper marketing
JBS USA plans expansion at Utah beef plant
Large MOM multiples
More tough times ahead for McDonald’s
Inside Wendy’s menu strategy
Chipotle on fire
Diamond acquires stake in potato chip maker
Market Insight - More cattle but beef prices still rising
Health and Wellness - On the cutting edge of digestive health
Ingredient Innovations - Backing up satiety benefits
Company Profile - Tyson Foods flying high
New Food Products
Ingredient Market Trends - Soybean oil market pulled lower, then higher
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - February 10, 2015