Tyson Foods Reports Strong Q4 Earnings

(Reuters) – Tyson Foods beat Wall Street expectations for a fourth-quarter profit on Tuesday, driven by lower costs and strong demand for its pork and beef products, despite a slowdown in the chicken segment, leading to an 8% increase in its shares.

Beef and Pork Demand

Concerns about budget-conscious consumers opting for cheaper proteins did not materialize, as demand for beef and pork bolstered margins for the largest U.S. meat-packer. Volume increases in beef suggested strong demand amid a tight cattle supply, with producers hesitant to rebuild herds due to pastures affected by years of drought.

Chicken Segment Performance

Although chicken volumes slightly decreased in the quarter, over half of Tyson's expectation for adjusted 2025 operating income between $1.8 billion to $2.2 billion is anticipated to arise from chicken sales. The beef segment, however, is expected to face ongoing challenges in the market.

Analyst Michael Lavery from Piper Sandler expressed concerns over the beef outlook for the next two years, though noted that chicken momentum was better than anticipated, albeit with "some downside risk" to prices.

Tyson's stock rose by 8.6% to $63.98 per share during morning trading.

Financial Highlights

Tyson reported an adjusted operating margin of 3.8% in the fourth quarter, an increase from 1.8% the previous year, largely due to lower grain prices and reduced raw material costs like feed and livestock prices. Adjusted earnings per share were 92 cents, surpassing analysts' estimates of 69 cents.

Net sales reached $13.57 billion, a 1.6% increase compared to analyst predictions of $13.39 billion. The company anticipates revenue for fiscal 2025 to remain flat or decrease by 1%, contrasted with analysts' expectations of a 1.8% increase to $54.09 billion.