Yahoo Finance How Did Tyson Foods’ Stock React to Fiscal 2Q16 Earnings?
Tyson Foods’ Fiscal 2Q16 Earnings and Updated Guidance
Tyson Foods’ strong stock performance
Tyson Foods’ (TSN) stock rose 1% after the company reported better-than-expected fiscal 2Q16 earnings on May 9. Earnings surpassed estimates by 11%, and revenue beat estimates by 2%. The stock closed at $68.24 compared to $67.25 in the previous day’s trading session. The stock rose another 2% on May 10 and closed at $69.27. The stock outperformed the Market, represented by the S&P 500 Index, by 27% on May 11. It closed the day at $68.48.
Tyson Foods’ stock reacted positively to previous earnings results, as well. The stock soared 10% after a better-than-expected fiscal 1Q16, when earnings beat estimates by 29%. It also rose 10% after the fiscal 4Q15 earnings release due to the company’s growth in revenue, updated guidance, and benefits from the Hillshire Brands acquisition.
The stock rose 33% in 2015. So far, it has risen 31% in 2016. The stock has risen at a faster rate over the past year due to positive earnings growth along with an increase in revenue and profits. Tyson Foods’ (TSN) stock has gained 21% since its previous earnings release on February 5. The stock has benefited from higher earnings growth and raised guidance for fiscal 2016.
CEO’s remarks
Donnie Smith, president and chief executive officer of Tyson Foods, said, “Our business continues to perform very well, delivering record second quarter operating income and return on sales, in what is typically the most challenging quarter of our fiscal year.”
He added, “Sales are growing in key retail product lines. The pricing and marketing investments we’ve made are paying off in increased volumes in strategic products including Hillshire Farm smoked sausage and lunchmeat, Jimmy Dean breakfast sausage and Ball Park hot dogs. With a focus on the longer term, we have a three-year pipeline of innovation across all segments with exciting new product launches to keep our offerings in the retail, food service and international channels relevant to consumers.”
Peers’ stock performance
Among its peers in the meat industry, Tyson Foods has gained the most. So far in 2016, Pilgrim’s Pride (PPC) has risen 31%, Sanderson Farms (SAFM) has gained 21%, and Hormel Foods (HRL) has risen 1.2%. Hormel Foods, Pilgrim’s Pride, and Sanderson Farms closed at $40.01, $25.98, and $93.64, respectively, on May 11.
The First Trust Consumer Staples AlphaDEX Fund (FXG) invests 5.1% of its holdings in Hormel Foods, 5.8% of its holdings in Tyson Foods, and 3.6% of its holdings in Pilgrim’s Pride. The SPDR S&P Dividend ETF (SDY) and the PowerShares DWA Momentum Portfolio (PDP) invest 0.75% and 1.5% of their respective portfolios in Hormel Foods.
In the next part of this series, we’ll see how analysts rate Tyson Foods after fiscal 2Q16 earnings.
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