Tyson Foods Inc. (TSN) delivered first-quarter 2011 adjusted earnings of 81 cents a share, exceeding the Zacks Consensus Estimate of 62 cents by 30.6% and the year-ago earnings of 41 cents by 97.6%.
Revenue and Margins
Net sales recorded a growth of 14.8% to $7.6 billion from $6,662 million in the year-ago quarter, but slightly missed the Zacks Consensus Estimate of $7,306 million. The upswing came as an outcome of sales growth across all its segments.
Tyson’s operating income shot up 83.7% to $507 million in the quarter compared with $6.6 billion in the prior-year quarter. Quarterly operating margin expanded 181 basis points to 6.5%, portraying solid margin in all its reporting segments.
Segment Details
Sales grew 8.0% in the Chicken segment to $2,619 million compared with $2,425 million in the year-ago quarter, on the back of strong volumes, higher average sales prices, gains from its recent acquisitions and prudent inventory management. Operating margin advanced to 6.9% in the Chicken compared with 3.2% in the year-ago quarter.
On a year-ago basis, sales rose 17.2% in the Beef segment to $3.2 billion compared with $2.7 billion, attributed to higher average price partially and 0.7% growth in volume. Segment operating margin contracted to 3.6% from 4.4% in the year-ago quarter.
Pork segment revenue spiked 30.7% to $1,238 million compared with $947 million in the year-ago quarter, powered by 23.5% jump in price and 5.8% growth in volume. Operating margin jumped to 14.3% in the Pork segment compared with 6.5% in the year-ago quarter.
Prepared Foods sales surged 13.0% to $806 million compared with $713 million in the year-ago quarter. However, the segment continues to face higher input costs, though fully offset by an increase in selling price. Segment operating margin plunged to 3.5% compared with 7.7% in the year-ago quarter.
Other Financial Updates
Tyson exited the quarter with cash and cash equivalents of $1.1 billion. Long-term debt was $2,124 million.
During the first quarter, Tyson used cash flows from operations to pay down its debt by nearly $45 million.
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