Tyson Foods Boosts Profit Outlook for 2016

Tyson Foods Inc. raised its profit forecast for the year, as the meat supplier reported better-than-expected earnings and revenue in the second quarter, helped by continued strong consumer demand.

The company raised its full-year profit forecast to a range of $4.20 to $4.30 a share, compared with prior guidance of $3.85 to $3.95 a share, which was already a projected record for annual earnings at the company.

Shares, which have risen 63% in the past 12 months, rose 4.1% premarket.

The Springdale, Ark., company has benefited in recent quarters from robust consumer spending, increased meat supplies and low prices for animal feed.

Donnie Smith, Tyson's chief executive, said the second quarter is typically is most challenging of its fiscal year. "We've produced record results in the first half of the fiscal year, and we expect continued strong performance in the second half," Mr. Smith said.

Tyson, the largest U.S. meat processor by sales, has said that expanding cattle, hog and poultry supplies would reduce costs for its prepared-foods business, while its restaurant clients would benefit from freer-spending consumers.

In the second quarter, the company expanded its adjusted operating margin to 7.7%, which Tyson said was a record for the period, from 5.5% a year before.

Over all, Tyson posted a profit of $432 million, or $1.10 a share, up from $310 million, or 75 cents a share, a year earlier. Excluding certain items, per-share earnings were $1.07, up from 75 cents. Analysts surveyed by Thomson Reuters forecast per-share earnings of 95 cents.

Revenue slid 8.1% to $9.17 billion. Analysts had anticipated $9.04 billion.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

May 09, 2016 08:35 ET (12:35 GMT)

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