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Factors Setting the Tone for Tyson Foods' (TSN) Q1 Earnings

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Tyson Foods, Inc. TSN is scheduled to release first-quarter fiscal 2020 results on Feb 6. Notably, this renowned meat products company has trailing four-quarter positive earnings surprise of 1.9%, on average. Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Estimates Picture

The Zacks Consensus Estimate for first-quarter fiscal 2020 earnings is pegged at $1.70 per share, which suggests an improvement of 7.6% from the year-ago quarter’s reported figure. The projection has remained unchanged in the past 30 days. The consensus mark for revenues is pegged at $11,115 million, which indicates an increase of 9% from the prior-year quarter’s figure.

Tyson Foods, Inc. Price and EPS Surprise


Tyson Foods, Inc. Price and EPS Surprise

Tyson Foods, Inc. price-eps-surprise | Tyson Foods, Inc. Quote

Key Factors to Note

Rising demand for protein-packed food products (chicken, beef, pork and turkey) has been a key catalyst for Tyson Foods. In this regard, the company boasts a rich portfolio of protein packed brands that have been growing rapidly across the globe. Moreover, it has been undertaking acquisitions along with offloading certain non-protein businesses to increase focus on areas with growth potential. These factors have been bolstering Tyson Foods’ performance. Notably, the Zacks Consensus Estimate for first-quarter sales in the Chicken segment is pegged at $3,599 million, which indicates an increase of 15.5% from the prior-year quarter’s figure.

Further, Tyson Foods has been gaining from efforts to augment its fresh prepared food products owing to consumers’ rising demand for natural fresh meat offerings. Notably, consensus mark for first-quarter sales in the Prepared Foods unit is at $2,213 million that calls for an increase of 3% from the prior-year quarter’s figure. Apart from this, the company has been optimistic about the export opportunities arising from the outbreak of swine fever in Africa.

However, higher input costs in some of the units have been a concern for Tyson Foods. Nevertheless, the company is focused on countering cost-related woes. To this end, its Financial Fitness Program — aims at enhancing operating and supply-chain efficiencies and reducing overheads — bodes well.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Tyson Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tyson Foods carries a Zacks Rank #2 and has an Earnings ESP of +1.37%.

Other Stocks With Favorable Combinations

Here are other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Post Holdings, Inc. (POST - Free Report) presently has an Earnings ESP of +5.47% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Hain Celestial Group, Inc. HAIN currently has an Earnings ESP of +5.26% and a Zacks Rank #2.

Campbell Soup Company CPB has an Earnings ESP of +3.34% and a Zacks Rank #2.

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