Tyson Foods says it will boost its beef production in fiscal 2021 after its third-quarter beef sales volume surged 24% to $4.95 million, up from $3.65 million a year ago, due to strong global demand and "reduced production inefficiencies associated with COVID-19."
"Our foodservice volume improved as the restaurant industry began to reopen and recover," Tyson Foods CEO Donnie King said in the company's third-quarter earnings release Monday. "Our beef business increased production to meet strong U.S. and international demand for higher-quality products."
Shares jumped on the news heading for the best percentage gain since June of 2020.
|TSN||TYSON FOODS INC.||90.47||-2.24||-2.42%|
Meanwhile, the meat processing giant expects its fiscal 2021 sales for chicken to be lower compared to the previous year based on current grain prices. Tyson's third-quarter chicken sales volume grew 3.3% to $3.47 million, up from $3.11 million a year ago. During the first nine months of fiscal 2021, sales volume fell 2.4% to $9.86 million, compared to 9.8 million a year ago.
The chicken segment posted a third-quarter operating loss of $279 million, widening from a loss of $120 million a year ago, as costs for feed rose to $270 million. The company also accrued an additional $225 million in legal contingency costs to resolve allegations of chicken price fixing, bringing its total legal contingency accrual to $545 million. Tyson's overall operating loss for the first nine months of fiscal 2021 is $489 million, compared to a profit of $36 million a year ago.
The U.S. Department of Agriculture estimates overall domestic beef production will increase by approximately 3% in fiscal 2021 compared to a year ago, while domestic production for chicken is expected to decrease less than 1% year over year.
Tyson reported a gross profit of $1.62 million, compared to $1.31 million a year ago, and quarterly net income of $753 million, or $2.05 per share, compared to $526 million, or $1.44 per share, a year ago. On an adjusted basis, Tyson earned $2.70 per share.
Tyson's overall third-quarter sales came in at $12.48 billion, compared to $10 billion a year ago.