Updated at 8:18AM EST
Tyson Foods (TSN) – Get Tyson Foods, Inc. Grade A Report Stronger-than-expected second-quarter earnings on Monday also boosted its full-year sales outlook, as the world’s largest food maker said strong global demand offset inflationary pressures across its supply chain.
Tyson Foods said adjusted earnings for the three months through March (the group’s fiscal second quarter) were $2.29 a share, up 71% from a year earlier and well above Wall Street’s consensus forecast of $1.88 a share. Tyson said group revenue rose 16 percent to $13.11 billion, again well ahead of analysts’ forecast of $12.85 billion.
Looking ahead to fiscal 2022, Tyson Foods said it expects revenue to be between $52 billion and $54 billion, up $3 billion from the lower end of its previous guidance, and about $2 billion in capital expenditures.
“Our first-half performance reflects our improving operational execution and strong customer and consumer demand for our brands and products,” said Chief Executive Officer Donnie King. “We continue to prioritize investments in our team members and our business in a number of ways, including increasing pay, expanding pilots for health and child care services, and providing skills and living services such as free college education and immigration legal services.”
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“While we continue to see inflationary pressures across the supply chain, we are working to reduce costs by continuing to improve efficiency, productivity and increasing capacity,” he added. “It’s us winning customers and consumers, winning team members and winning Part of an excellent execution strategy.”
Shares of Tyson Foods rose 2.9% in premarket trading after the earnings report to open at $93.45, a move that would push the stock’s year-to-date gain to around 6%.
Earlier this year, President Joe Biden called for new rules in the meatpacking and production industry to combat what he called “exploitative” practices in the industry, which has driven up prices and fueled food inflation in the world’s largest economy soaring.
Tyson Foods is one of four companies, along with Cargill and Brazil’s JBS Group and National Beef Packing Co., which the USDA says control about 85 percent of the grain-fed cattle that end up in consumer meat products.
Food production costs rose 2.4% in March compared with 2021 levels, while broader food prices rose 16.2% from last year, the biggest year-on-year increase in more than a decade, according to the latest data from the Commerce Department.