Profits were up to $249m from $76m in the same quarter in 2012, while sales hit $8.7bn, up from $8.3bn in the year-ago period.
“It was our second-best ever quarter for EPS, along with record sales of $8.7 billion. The Chicken segment had record earnings, and both chicken and beef segments had their highest sales of any quarter. Prepared Foods had its highest Q3 sales,” Donnie Smith, Tyson’s president and chief executive officer said during a conference call with investors.
The company’s chicken segment delivered operating income of $220m, driven by a 4.4% increase in sales volumes and a 6% increase in prices. It achieved an operating margin of 7% despite higher feed costs, which reached $105m in Q3 2013.
The beef business also rebounded on the back of less volatile live cattle markets, with earnings of $114m and a 3.1% operating margin. Beef sales volumes were up 3.8% year-on-year in Q3, although they remained down by 3.6% over the nine-month period.
Pork profits were down to $67 from $69 in Q3 2013, with a 2.9% increase in sales prices offset by a 3.8% fall in volumes year-on-year as the result of reduced export demand. However, the company said “operating income remained strong in the nine months of fiscal 2013, despite brief periods of imbalance in industry supply and customer demand.”
Future focus
Looking forward, Tyson said it expected fiscal 2013 sales to reach approximately $34.5bn, with profit boosted by higher prices and lower input costs.
“We continue to see macroeconomic indicators pointing to a steady but modest recovery. We aren’t relying on a better economy to grow our business, but I think Tyson Foods is uniquely positioned to capitalize on those opportunities as they occur. According to the Nielsen data, retail sales of fresh meat were up about 4% versus the same quarter a year ago, with volume up a little over 1%,” Smith told investors.
The company is aiming to hit sales of $36bn in fiscal 2014, driven by sales of value-added products.
“We’re accelerating the sales of value-added products with a goal of 6% to 8% annual increase. We’re at 5% after 3 quarters and gaining momentum from an aggressive new product launch schedule,” said Smith.
“Frozen value-added poultry at retail is the focus of many of these new products, and Tyson is driving growth in this category, which, in the past year, has seen about 3.5% growth. Fresh and IQF chicken, along with case-ready beef and pork, are all performing very well.”