We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Protein Demand Drive Tyson Foods' (TSN) Q2 Earnings?
Read MoreHide Full Article
Tyson Foods, Inc. (TSN - Free Report) is slated to report second-quarter fiscal 2018 results on May 7, before the opening bell. Rising demand for protein-rich products has been favoring Tyson Foods’ performance. Positive synergies from buyouts and cost-saving efforts have also been fueling the company’s growth.
However, we note that Tyson Foods has a mixed record of earnings surprises over the trailing four quarters. Let’s see how things are shaping up prior to the upcoming quarterly release.
Factors Impacting Q2
Rising demand for protein and meat products has been an aspect of cheer for Tyson Foods for a while. This is evident from the fact that sales volumes across the Beef, Chicken and Prepared Foods segments increased 4.5%, 7.3% and 11.6%, respectively, during the first quarter of fiscal 2018. Further, management expects demand for protein to continue to rise and is well placed to exploit opportunities in the space. For fiscal 2018, USDA expects overall domestic protein production (chicken, beef, pork and turkey) to rise roughly 3% year over year.
Such a positive market scenario has driven Tyson Foods to make several investments and cater to consumers’ demand efficiently. The company’s investments in Memphis Meats and Beyond Meat are the latest examples. It has also been bolstering its poultry production capacity in Tennessee and other regions. Apart from this, the company has been steadily expanding fresh prepared foods offering, courtesy of consumers’ rising demand for natural fresh meat offerings without added hormones or antibiotics.
Buyouts Add Strength to Portfolio
Tyson Foods’ prepared food segment is expected to benefit from the positive synergies of the AdvancePierre buyout. Through this acquisition, management has been trying to expand fresh food offerings along with bolstering protein brands portfolio. The acquisition led to a 2.4% and 9.5% rise in sales volume during the third and fourth quarters of fiscal 2017, respectively. In first-quarter fiscal 2018 sales volume jumped 11.6%. Further, the company expects incremental sales of approximately $1.1 billion from AdvancePierre in fiscal 2018. Also, the company is on track to integrate Original Philly Holdings (acquired in November 2017) within its Prepared Foods segment.
Driven by such positives, analysts polled by Zacks expect sales across Beef, Chicken, Pork and Prepared Foods segments to rise 6%, 6.1%, 2% and 17.3%, respectively, in the yet-to-be-reported quarter. Also, the Zacks Consensus Estimate for net sales for the impeding quarter is expected at $9,954 million, depicting a rise of almost 9.6% from the prior-year quarter’s figure.
Tyson Foods, Inc. Price, Consensus and EPS Surprise
Toward the latter half of 2017, Tyson Foods announced a Financial Fitness Program, which is expected to enhance operating efficiency, reduce overheads and fuel the bottom line in the forthcoming periods. These efforts are expected to generate total savings of roughly $200 million in fiscal 2018, which bode well for the upcoming quarterly release. Notably, the company generated savings of nearly $37 million from this program in the first quarter, which boosted the bottom line.
We expect that the aforementioned factors will significantly aid the company’s bottom-line performance during the second quarter. Evidently, the consensus mark for earnings for the to-be-reported quarter is currently pegged at $1.37, depicting a surge of 35.6% from the year-ago quarter’s figure. However, the projection has gone down by four cents over the last 30 days, perhaps due to the the apprehensions stemming from the recently raised tariff rates on pork by China. Escalating labor and freight expenses are also a hurdle for the company, which may impede the bottom line.
Wrapping it up, lets take a look at the picture unveiled by the Zacks Model for the impending quarter.
Zacks Model
Our proven model does not show that Tyson Foods is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tyson Foods has an Earnings ESP of -2.88%. Although the company’s Zacks Rank #3 increases the predictive power of ESP, a negative ESP makes our surprise prediction difficult.
Stocks With Favorable Combinations
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Church & Dwight Co., Inc. (CHD - Free Report) , a Zacks Rank #3 stock, has an Earnings ESP of +0.52%.
Estee Lauder (EL - Free Report) , a Zacks Rank #3 company, has an Earnings ESP of +0.67%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Will Protein Demand Drive Tyson Foods' (TSN) Q2 Earnings?
Tyson Foods, Inc. (TSN - Free Report) is slated to report second-quarter fiscal 2018 results on May 7, before the opening bell. Rising demand for protein-rich products has been favoring Tyson Foods’ performance. Positive synergies from buyouts and cost-saving efforts have also been fueling the company’s growth.
However, we note that Tyson Foods has a mixed record of earnings surprises over the trailing four quarters. Let’s see how things are shaping up prior to the upcoming quarterly release.
Factors Impacting Q2
Rising demand for protein and meat products has been an aspect of cheer for Tyson Foods for a while. This is evident from the fact that sales volumes across the Beef, Chicken and Prepared Foods segments increased 4.5%, 7.3% and 11.6%, respectively, during the first quarter of fiscal 2018. Further, management expects demand for protein to continue to rise and is well placed to exploit opportunities in the space. For fiscal 2018, USDA expects overall domestic protein production (chicken, beef, pork and turkey) to rise roughly 3% year over year.
Such a positive market scenario has driven Tyson Foods to make several investments and cater to consumers’ demand efficiently. The company’s investments in Memphis Meats and Beyond Meat are the latest examples. It has also been bolstering its poultry production capacity in Tennessee and other regions. Apart from this, the company has been steadily expanding fresh prepared foods offering, courtesy of consumers’ rising demand for natural fresh meat offerings without added hormones or antibiotics.
Buyouts Add Strength to Portfolio
Tyson Foods’ prepared food segment is expected to benefit from the positive synergies of the AdvancePierre buyout. Through this acquisition, management has been trying to expand fresh food offerings along with bolstering protein brands portfolio. The acquisition led to a 2.4% and 9.5% rise in sales volume during the third and fourth quarters of fiscal 2017, respectively. In first-quarter fiscal 2018 sales volume jumped 11.6%. Further, the company expects incremental sales of approximately $1.1 billion from AdvancePierre in fiscal 2018. Also, the company is on track to integrate Original Philly Holdings (acquired in November 2017) within its Prepared Foods segment.
Driven by such positives, analysts polled by Zacks expect sales across Beef, Chicken, Pork and Prepared Foods segments to rise 6%, 6.1%, 2% and 17.3%, respectively, in the yet-to-be-reported quarter. Also, the Zacks Consensus Estimate for net sales for the impeding quarter is expected at $9,954 million, depicting a rise of almost 9.6% from the prior-year quarter’s figure.
Tyson Foods, Inc. Price, Consensus and EPS Surprise
Tyson Foods, Inc. Price, Consensus and EPS Surprise | Tyson Foods, Inc. Quote
Enhancing Operational Efficiency
Toward the latter half of 2017, Tyson Foods announced a Financial Fitness Program, which is expected to enhance operating efficiency, reduce overheads and fuel the bottom line in the forthcoming periods. These efforts are expected to generate total savings of roughly $200 million in fiscal 2018, which bode well for the upcoming quarterly release. Notably, the company generated savings of nearly $37 million from this program in the first quarter, which boosted the bottom line.
We expect that the aforementioned factors will significantly aid the company’s bottom-line performance during the second quarter. Evidently, the consensus mark for earnings for the to-be-reported quarter is currently pegged at $1.37, depicting a surge of 35.6% from the year-ago quarter’s figure. However, the projection has gone down by four cents over the last 30 days, perhaps due to the the apprehensions stemming from the recently raised tariff rates on pork by China. Escalating labor and freight expenses are also a hurdle for the company, which may impede the bottom line.
Wrapping it up, lets take a look at the picture unveiled by the Zacks Model for the impending quarter.
Zacks Model
Our proven model does not show that Tyson Foods is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tyson Foods has an Earnings ESP of -2.88%. Although the company’s Zacks Rank #3 increases the predictive power of ESP, a negative ESP makes our surprise prediction difficult.
Stocks With Favorable Combinations
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Pilgrim's Pride Corporation (PPC - Free Report) has an Earnings ESP of +4.67% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Church & Dwight Co., Inc. (CHD - Free Report) , a Zacks Rank #3 stock, has an Earnings ESP of +0.52%.
Estee Lauder (EL - Free Report) , a Zacks Rank #3 company, has an Earnings ESP of +0.67%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>