Updated at 9:35 am EST
Tyson Foods Inc. (TSN) – Get Tyson Foods, Inc. Class A Report posted stronger-than-expected second quarter earnings Monday, while boosting its full-year sales outlook, as the world’s biggest food producer said solid global demand offset inflationary pressures across its supply chain.
Tyson Foods said adjusted earnings for the three months ending in March, the group’s fiscal second quarter, were pegged at $2.29 per share, up 71% from the same period last year and firmly ahead of the Street consensus forecast of $1.88 per share. Group revenues, Tyson said, rose16% to $13.11 billion, again firmly ahead of analysts’ forecast of an $12.85 billion tally.
Looking into the 2022 financial year, Tyson Foods said its sees revenues of between $52 billion and $54 billion, a $3 billion increase from the lower-end of its prior guidance, with capital expenditures of around $2 billion.
“Our performance in the first half of the year reflects our improving operational execution and strong customer and consumer demand for our brands and products,” said CEO Donnie King. “We continue to prioritize investment in our team members and business in a number of ways, including increasing pay, expanding pilots of health and child care services, and providing skills and life services, such as free college education and legal services for immigration.”
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“Although we continue to see inflationary pressures across the supply chain, we are working to drive costs down by continuing to increase our efficiency, productivity, and bringing more capacity on line,” he added. “This is all part of our strategy to win with customers and consumers, win with team members and win with excellence in execution.”
Tyson Foods shares were marked 1.4% higher in early trading immediately following the earnings release to change hands at $92.00, a move that would nudge the stock’s year-to-date gain to around 5.6%.
Earlier this year, President Joe Biden called for new rules in the meat packing and production industry to combat what he called “exploitation” in the sector that was driving up prices and contributing to a food inflation surge in the world’s biggest economy.
Tyson Foods is one of four companies — along with Cargill and Brazil-based groups JBS and National Beef Packing Co. — that the U.S. Department of Agriculture says control around 85% of the grain-fatted cattle that are ultimately turned into consumer meat products.
Food production costs were up 2.4% in March, compared to 2021 levels, while food prices more broadly rose 16.2% from last year, according to the most recent Commerce Department data, the biggest year-on-year increase in more than a decade.