SPRINGDALE – Lifted by dramatically improved margins in its Chicken and Prepared Foods segments, quarterly profits were sharply higher at Tyson Foods, Inc.
Net income in the first quarter ended Dec. 27 was $309 million, equal to 77c per share on the common stock, up 22% from $254 million, or 76c per share, during the first quarter of fiscal 2014. Weighted shares outstanding in the quarter grew to 416 million from 354 million, following a share offering in July 2014.
Quarterly net sales were $10,817 million, up 23% from $8,761 million. The higher sales reflected the first full quarter of results of Hillshire Brands, acquired by Tyson in August in an $8.7 billion transaction.
The acquisition was a focus of comments of Donnie Smith, president and chief executive officer of Tyson, in connection with the quarterly results.
“We are proceeding with the integration of Hillshire Brands,” he said. “I want to thank our team members for their ability to quickly focus on the business as we brought the two companies together. The first quarter was a crucial time, and the team handled it well. Their efforts will be vital to our success going forward, and I don't think Tyson Foods could be in a better position. We've set ourselves up for another record year.”
Operating profits of the chicken business in the first quarter rose to $351 million, up 39% from $253 million in the first quarter a year earlier. Operating margins grew by a third to 12.6% from 9.5%. Chicken sales were $2,780 million, up 4.7%, comprising a volume gain of 3.1% and an price increase of 1.5%.
Prepared Foods operating profits, reflecting the Hillshire transaction, blossomed to $71 million, from $16 million. Operating margins widened to 3.3% from 1.8%. Sales were $2,133 million, up from 907 million.“We achieved $60 million in synergies in the first quarter, and we are confident we will exceed the $225 million synergy target for this fiscal year,” Mr. Smith said. “We also reiterate our guidance of adjusted earnings in the range of $3.30 to $3.40 per share.”