US - US meat and poultry producer Tyson Foods reported a strong performance in their third quarter results, despite the beef market suffering from the US port disruptions.
The company saw record adjusted operating income up 40 per cent to $568 million, and record cash flows from operations of $864 million.
Sales increased 4 per cent to approximately $10.1 billion, with the chicken segment operating margin of 11.4 per cent, and a record Prepared Foods segment adjusted operating margin of 10.9 per cent.
"The Prepared Foods and Chicken segments performed very well in the fiscal third quarter while managing numerous challenges," said Donnie Smith, president and chief executive officer of Tyson Foods.
"The strong results in these two segments demonstrate the benefits of our branded, value-added product portfolio and multi-channel, multi-protein business model by partially offsetting soft results in the Beef and Pork segments.
"Our beef business suffered from export market disruptions that had an $84 million impact on third quarter results, and we continue to see very high cattle costs at a time when product values and export issues are making it difficult to realise expected revenue levels in this spread business.
"While we are pleased with the performance of our business overall, unless beef market conditions improve rapidly, we will not achieve our previous guidance of $3.30-$3.40 adjusted earnings per share. As a result, we are modifying fiscal 2015 guidance to $3.10-$3.20 adjusted EPS.
"We reduced our total net debt $688 million during the third quarter. Because we expect to be ahead of schedule on reaching leverage ratio goals, and we see great value in our shares, we plan to start buying back stock in the fourth quarter.
"Synergy capture from the integration of Hillshire Brands and profit improvement from our legacy Prepared Foods operations is going extremely well. Previously, we raised synergy estimates to more than $250 million, and now we are on track to achieve approximately $300 million in fiscal 2015.
"We've positioned ourselves well for fiscal 2016 and we're confident in our ability to achieve at least 10 per cent annual EPS growth over time," Mr Smith said.
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