Tyson Q2 profit exceeds expectations
May 4, 2015
by Erica Shaffer
SPRINGDALE, Ark. – Despite weakness in sales, Tyson Foods, Inc. reported a better-than-expected profit of $310 million for the second quarter – a 46 percent jump over the comparable year-ago period.
Tyson reported second quarter income of $310 million, up from $213 million in the comparable period in 2014. Sales climbed 10.5 percent to $9.98 billion from $9.03 billion.
Sales volume in Tyson's Chicken segment was flat for the quarter. But for the first six months of fiscal 2015, sales volume grew on stronger demand for chicken products and a mix of rendered product sales. Operating income increased on an improved sales mix along with lower feed costs, which dropped $75 million in the quarter, the company said.
Prepared Foods sales volume advanced incremental volumes from the Hillshire Brands acquisition, Tyson Foods reported. Average sales prices were higher primarily due to price increases associated with better product mix which also was positively impacted by the acquisition of Hillshire Brands, the company said.
Higher sales volume and average sales price drove improvements to operating income in the segment. Lower raw material costs of approximately $40 million also provided tailwinds.
“Our branded, value-added portfolio of complementary products has allowed us to achieve the balance needed to produce consistent, sustainable growth,” said Donnie Smith, president and CEO. “We have structured our company to capitalize on the tailwinds and to manage through the headwinds in the parts of our business that are subject to commodity markets. By producing innovative, protein-centric foods, we are uniquely positioned to meet consumers' needs for all meal occasions and all day parts, at home and away from home.”