Tyson expects 23% EPS growth in 2014
FT. LAUDERDALE - During a presentation to investors at the Bank of America Merrill Lynch Global Agriculture Conference on Feb. 27, executives from Tyson Foods, Inc., provided a glimpse of the company's expected performance, both domestically and internationally, in the 2014 fiscal year.
"While we don't typically provide earnings guidance, we do think we'll deliver at least $2.78 in fiscal 2014, which would be in excess of 23 percent EPS growth," said Jon Kathol, Tyson's vice president of investor relations.
Looking ahead, Kathol said the company is expected to deliver at least 10 percent EPS growth in successive years. From 2010 to 2013 the company invested $2.5 billion in its continued improvements and growth, including acquisitions. It's no secret that global growth is a big part of Tyson's future as well, specifically in China.
"We are going to grow international, in-country production," he said, although growth plans in China are in a holding pattern, pending market conditions there that have been hindered by avian influenza. "We're changing the pace, not the path," he said of the company's plans in China. Even so, long-term plans include international production to grow at between 12 percent and 16 percent annually, once market corrections occur. Meanwhile, he said Tyson remains committed to that geographic region. We will maintain a judicious approach and be ready to grow in China when market conditions improve," he said, adding that EPS should grow at 10 percent annually over time.
Tyson's top line sales are forecast to increase 3 percent to 4 percent annually. Value-added product sales are expected to grow between 6 percent and 8 percent. Donnie King, president of prepared foods, customer and consumer solutions for Tyson, told investors it is consumer insights that drive innovation at Tyson, which has helped grow the company's Prepared Foods segment to about 10 percent of its annual sales.
King cited Tyson's recent entry into the breakfast food category with its Wright Brand sausage and Tyson Day Starts frozen breakfast sandwiches, flatbreads and wrapped omelets as examples of the company's research-based product innovation that are part of Tyson's efforts to continue growing its Prepared Foods segment.
"Many of you know us as a chicken company and we are very proud of that," he said, adding that Tyson is more than chicken, referring to its diverse portfolio that includes multiple species and product offerings that include tortilla production, handheld foods processing, pizza toppings, soups, sauces, pizza crust and breakfast items. "Most of our competitors compete in one space or another," he said.