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Jun 27, 2020
Tyson Foods Q3 2020 Earnings Report
Tyson Foods' Q3 results were impacted by COVID-19 related expenses, but the company delivered strong results led by strength in Beef and Pork segments.
Key Takeaways
Tyson Foods reported a decrease in sales and earnings per share for the third quarter of 2020, primarily due to COVID-19 related expenses. However, the company saw strong performance in its Beef and Pork segments.
GAAP EPS of $1.44, down 22% from prior year; Adjusted EPS of $1.40, down 5% from prior year
GAAP operating income of $775 million and Adjusted operating income of $760 million
Total Company GAAP operating margin of 7.7% and adjusted operating margin of 7.6%
Liquidity of $3.1 billion at June 27, 2020
Revenue by Segment
Forward Guidance
For fiscal 2021, USDA indicates domestic protein production (beef, pork, chicken and turkey) should increase approximately 1% from fiscal 2020 levels. We expect net interest expense to approximate $440 million for fiscal 2021.
Positive Outlook
- USDA projects domestic production will increase approximately 3% in fiscal 2021 as compared to a COVID-19 impacted fiscal 2020 for beef.
- We also expect ample supplies in regions where we operate our plants for beef.
- USDA projects domestic production will increase approximately 1% in fiscal 2021 as compared to a COVID-19 impacted fiscal 2020 for pork.
- USDA projects a relatively flat to slightly increased outlook for chicken production in fiscal 2021 as compared to fiscal 2020.
- We expect improved results from our foreign operations in fiscal 2021.
Challenges Ahead
- The challenges are anticipated to increase our operating costs and negatively impact our volumes for the remainder of fiscal 2020 and into fiscal 2021.
- Operationally, we have faced and expect to continue to face capacity utilization slowdowns in production facilities from team member absenteeism and choices we make to ensure team member health and safety.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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