Tyson Foods reports results for Q1 2022

United States
Published:  09 February, 2022
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The U.S.-headquartered meatpacker and hide processor has reported its financial results for the first quarter of the 2022 fiscal year.

Tyson Foods reported adjusted operating income of US$1.4 billion for the period, up 40% from the prior year. Adjusted operating margin was 11.1% while adjusted EPS was reported as US$2.87, up 48% from Q1 2021.

For its beef segment, Tyson Food reported that sales volume decreased during the first quarter due to impacts associated with a challenging labour environment and increased supply chain constraints, partially offset by strong global demand.

Sales of beef for the first quarter of 2022 were US$5 billion, a 22.6% increase from sales of almost US$4 billion in the same period in 2021. Tyson reported an average price change of 31.7% for beef. Operating income for beef during the period was a loss of US$956 million against a loss of US$528 million in the same period in 2021.           

Tyson reports that the average sales price increased as input costs such as live cattle, labour, freight and transportation costs increased and demand for the company’s beef products remained strong.

Operating income increased due to strong demand as the company continued to optimise revenues relative to live cattle supply and a reduction in direct incremental expenses related to Covid-19, partially offset by production inefficiencies due to the impacts associated with a challenging labour environment.

Additionally, Tyson reported that operating income in fiscal 2021 was impacted by a US$55 million gain from the recovery of cattle inventory related to a cattle supplier's misappropriation of company funds.

Outlook

The USDA projects domestic production of beef will decrease approximately 1% in fiscal 2022 as compared to fiscal 2021.

The company anticipates another strong year with an adjusted operating margin at the upper end of 9% to 11% in fiscal 2022. Tyson forecasts that the first half of the fiscal year will be stronger than the second half as a combination of higher utilisation and demand for cattle may result in a narrowing spread. It projects sales across the board to be at the upper end of US$49 billion to US$51 billion for the full 2022 fiscal year.