Tyson Foods Raises 2021 Revenue Forecast Due To High Beef Demand
Tyson Foods Inc. has raised its forecast for fiscal 2021 revenue and reported higher-than-expected quarterly earnings due to strong demand for its beef products from US restaurants and hotels resuming business, Reuters reported.
Photo Insert: The Tyson Foods trucks have become a company trademark.
Pent-up demand among consumers for a dine-in experience following the easing of COVID-19 restrictions has boosted sales for US meatpackers, which have also benefited from robust exports, Reuters reported.
Total sales in the quarter ended July 3 rose to $12.48 billion from $10.02 billion a year earlier. Analysts on average were expecting sales of $11.49 billion, according to IBES data from Refinitiv.
Net income attributable to Tyson increased to $749 million, or $2.05 per share, from $526 million, or $1.44 per share, a year earlier. On an adjusted basis, Tyson earned $2.70 per share, crushing estimates of $1.62.
"Our foodservice volume improved as the restaurant industry began to reopen and recover," said Donnie King, who in June became Tyson's fifth chief executive in five years.
The Jimmy Dean hotdogs maker said it expects total sales of about $46 billion to $47 billion for fiscal 2021, compared with an earlier forecast range of $44 billion to $46 billion.
Analysts on average expect sales of $45.09 billion, according to IBES data from Refinitiv. Tyson has increased beef production to meet strong demand for higher-quality products, according to the company. Its pork business, however, is grappling with limited supplies of US pigs.
In Tyson's chicken business, costs for feed jumped by $270 million in the quarter ended July 3. The unit posted a quarterly operating loss of $279 million, compared to a loss of $120 million a year earlier.
Tyson also accrued an additional $225 million to resolve legal claims alleging Tyson engaged in price-fixing in chicken, bringing its total recorded legal contingency accrual to $545 million in the matter.