SPRINGDALE, ARK. — Despite a weak fourth quarter, Tyson Foods, Inc. concluded a profitable fiscal 2014 and has expectations for fiscal 2015 as the company reaps the benefits of its acquisition of Hillshire Brands.
For the year ended Sept. 27, Tyson Foods net income rose to $864 million, equal to $2.48 per share on the common stock, an increase compared with the previous year when the company earned $778 million, or $2.26 per share.
Sales for the year totaled $37,580 million compared with $34,374 million the previous year.
“Two years ago, I told our team members, ‘The turnaround is over; it’s time to turn it on,’” said Donnie Smith, president and chief executive officer. “They did and the proof is in our second year in a row of record sales and earnings.
“This is an exciting time as we integrate Hillshire Brands and Tyson Foods and I believe that when we look back on this merger years from now, we’ll see it as a watershed event. We’re setting higher expectations and anticipating more growth and increased profitability, specifically in the Chicken and Prepared Foods segments. In the long term, our Chicken segment should generate a 7% to 9% return on sales, although we expect fiscal 2015 to be particularly strong with a return of more than 10%.”
Chicken sales rose approximately 3% during the year to total $10,988 million, and Prepared Foods sales rose 10% to $3,322 million. Pork sales rose less than 1% while Beef business unit sales fell less than 1%.
For the fourth quarter, Tyson Foods net income equaled $137 million, or 35c per share, a decline compared with the fourth quarter of fiscal 2013 when the company earned $261 million, or 70c per share.
Sales for the quarter were $10,105 million compared with $8,894 million.
Much of the fourth quarter decline in net income may be attributed to the acquisition and integration of Hillshire Brands. Although Beef segment sales did slip approximately 3% during the quarter.
Despite the weak quarterly results, Mr. Smith’s outlook is for a very strong 2015.
“Fiscal 2015 should be another great year and is already off to a strong start,” he said. “We are projecting adjusted earnings for the year in the range of $3.30 to 3.40 per share, and as we look ahead to 2016, we see continued success and growth.”
In fiscal 2015, Tyson Foods expects overall domestic protein production to increase approximately 1% from fiscal 2014 levels. Grain supplies are forecast to increase in fiscal 2015, according to the company, which should result in lower input costs as well as decreased costs for cattle and hog producers.On a segment by segment basis, Tyson Foods expects chicken production to increase 2% to 3% during the year, beef to fall 4% to 5% and pork production to increase 2% to 3%. The company also expects sales in the Prepared Foods division to increase by $4 billion due to the acquisition of Hillshire Brands.