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Tyson Foods beats revenue estimates as chicken prices soar

The Tyson Foods logo is seen on May 22, 2022 in Davos, Switzerland. REUTERS/Arnd Wiegmann/File Photo

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Aug 8 (Reuters) – Tyson Foods Inc ( TSN.N ) quarterly revenue beat analysts’ estimates on Monday as its chicken prices rose.

Still, earnings per share missed analysts’ estimates, sending shares lower.

Packaged food makers have so far faced little pushback from consumers on price hikes forced by rising costs, but analysts and companies are concerned that demand could be hurt.

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Sales at Tyson’s poultry unit were $4.37 billion, up 25% from a year earlier, as prices soared 20.1% and volumes fell.

Tyson said meat prices increased to offset rising inflation, including $145 million in higher costs for feed ingredients in the April to June quarter.

After struggling to meet demand to produce consistent results, Tyson sought to improve performance at the poultry unit.

“The turnaround of our poultry business continues,” said chief executive Donnie King.

Global poultry prices hit an all-time high in July, but overall food prices were further away from records hit in March, the United Nations’ Food Agency said last week. Read more

Average selling prices for Tyson’s beef fell 1.2% in the quarter, the company said, as demand for premium cuts eased. Sales volume in beef, the company’s largest division, increased another 1.3%. The unit reported an adjusted operating margin of 10.2%, up from 12.7% in the previous quarter and 22.6% a year ago.

In Tyson’s pork business, the company said sales volumes and prices were lower amid reduced export and retail demand. Tyson lowered its forecast range for operating margins to 3% to 5% in fiscal 2022 from a previous estimate of 5% to 7%.

Tyson trimmed its projection for capital spending by $2 billion to $1.9 billion.

Overall, the Jimmy Dean sausage maker’s quarterly sales rose to $13.50 billion from $12.48 billion a year ago. Analysts on average had expected sales of $13.25 billion, according to Refinitiv’s IBES data.

Adjusted earnings per share were $1.94 for the quarter, missing estimates of $1.98.

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Reporting by Praveen Paramashivam in Bengaluru and Tom Polansek in Chicago; Edited by Vinay Dwivedi and Bernadette Baum

Our criteria: Thomson Reuters Trust Principles.

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