Main takeaways from Tyson Foods’ (TSN) Q3 2024 earnings report

Shares of Tyson Foods, Inc. (NYSE: TSN) rose over 3% on Monday after the company delivered third-quarter 2024 earnings results that beat estimates. The stock has gained 18% year-to-date. The company’s sales guidance for the full year of 2024 remained unchanged. Here are the main takeaways from the earnings report:

Better-than-expected results

Tyson’s sales for Q3 2024 increased around 2% year-over-year to $13.35 billion, beating estimates of $13.2 billion. The company posted GAAP EPS of $0.54 compared to a loss of $1.18 per share last year. Adjusted EPS of $0.87 beat projections of $0.65.

Business performance

During the third quarter, Tyson recorded sales across most of its segments. A drop in sales in the Chicken segment was more than offset by growth in the Beef segment. Sales in Chicken declined 5% YoY to $4 billion, mainly due to the pass-through impact of lower feed costs. Volume in this segment dipped 0.4% while price dropped 3.7%.

Adjusted operating income (AOI) for the Chicken segment was $307 million compared to a loss of $63 million in the year-ago period. AOI benefited from strategic actions, operational efficiencies, and lower input costs but this was partly offset by lower pricing.

Sales in the Beef segment increased 6% to $5.2 billion, helped by higher price per pound. Volume was up 4.4% and price was up 1.4%. The segment posted an adjusted operating loss of $69 million due to spread compression.

The highest growth was in the Pork segment where sales rose 8% YoY to $1.5 billion, driven by healthy global demand. Volume rose 1.2% while price was up 12.6%. AOI was $22 million, driven by an improvement in spreads.

Sales in the Prepared Foods division increased 4% to $2.4 billion. Volume grew 2%, driven mainly by growth in the foodservice channel. Price was up 0.1%. AOI decreased 8% to $203 million, mainly due to higher raw material and startup costs. Sales in the International/Other segment decreased 8% to $582 million in Q3. Volume was up 6.5% and price was down 14.6%.

Updated outlook

Tyson expects its sales for fiscal year 2024 to be relatively flat compared to fiscal year 2023. The company revised its outlook for some of its segments, and now expects adjusted operating income for Chicken to range between $850-950 million and for Pork to range between $100-200 million. This compares to the previous ranges of $700-900 million for Chicken and $50-150 million for Pork.

Tyson expects adjusted operating loss for Beef to range between $400 million and $300 million in FY2024, versus the prior range of a loss of $400 million to $100 million. The outlook for Prepared Foods AOI remains unchanged at $850-950 million. The company’s total AOI is now expected to be $1.6-1.8 billion versus the previous range of $1.4-1.8 billion.