Tyson Foods (TSN) Rises as Earnings Top Estimates

Tickers in this article: TSN

NEW YORK (TheStreet) -- Tyson Foods  was rising 6.94% to $36.88 after the chicken, beef and pork provider reported first-quarter profit that surpassed analysts' expectations.

Tyson reported first-quarter profit of $254 million, or 75 cents a share, up from $173 million, or 48 cents a share, in the same period a year earlier. Sales also increased 4.7% to $8.76 billion. Analysts surveyed by Thomson Reuters expected earnings per share of 63 cents and revenue of $8.75 billion.

The company noted in a conference call with analysts on Friday, though, that it would slow the pace of its expansion in China after food-safety concerns decreased the demand for chicken in the nation, according to The Wall Street Journal. CEO Donnie Smith said on the call that Tyson no longer expects its operations in China to break even by the end of fiscal 2014.

TheStreet Ratings team rates TYSON FOODS INC as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about its recommendation:

"We rate TYSON FOODS INC (TSN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TSN's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 7.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 59.22% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TSN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • TYSON FOODS INC has improved earnings per share by 22.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TYSON FOODS INC increased its bottom line by earning $2.31 versus $1.68 in the prior year. This year, the market expects an improvement in earnings ($2.77 versus $2.31).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 41.1% when compared to the same quarter one year prior, rising from $185.00 million to $261.00 million.
  • You can view the full analysis from the report here: TSN Ratings Report