Meat products producer Tyson Foods, Inc. (TSN) on Monday reported that profit for the third quarter soared from last, boosted higher chicken sales and significantly positive operating margins at the chicken segment, despite a quarterly sales decline of 2.8%.
Total volume for the quarter also increased 3.1% from last year, while average decline in price was 5.6%. Operating performance at chicken segment significantly improved, and Beef, Pork and prepared-foods segments performed comparatively better. However, the company warned that the soft demand for protein is likely to make the fourth quarter more challenging than the third quarter.
In a statement, interim president and chief executive officer, Leland Tollett said, "Our earnings for the third quarter reflect a solid performance by all of our operating segments. In the midst of a slow economy and a challenging operating environment, we stayed focused and worked as a team to produce results within historical normalized ranges for each segment."
The company added that it is encouraged by the progress in improving operational efficiencies in the Chicken segment, while Beef, Pork and Prepared Foods segments continue to perform well. The company also has been disciplined in managing working capital and have reduced inventory by a substantial amount in the second and third quarters.
Third Quarter Results
The Springdale, Arkansas-based company reported net income of $134 million or $0.35 per share, sharply higher than $9 million or $0.03 per share in the prior-year quarter. Income from discontinued operations for the latest quarter was $7 million or $0.02 per share, compared to $12 million or $0.04 per share in the comparable quarter a year ago.
Income from continuing operations for the quarter was $127 million or $0.33 per share, compared to loss from continuing operations of $3 million or $0.01 per share in the year-ago quarter.
On average, ten analysts polled by Thomson Reuters expected the company to report earnings loss of $0.22 per share for the third quarter. Analysts' estimates typically exclude special items.
Sales for the quarter declined 2.8% to $6.66 billion from $6.85 billion in the same quarter last year, and missed seven Wall Street analysts' consensus estimate of $6.68 billion by a whisker. Total volume for the quarter increased 3.1% from last year, while average decline in price was 5.6%.
Among Tyson Foods' peers, Austin, Minnesota-based Hormel Foods Corp. (HRL) is scheduled to announce financial results for the third quarter on August 20. Analysts estimate earnings of $0.46 per share on revenues of $1.70 billion for the third quarter.
Another peer, Smithfield, Virginia-based Smithfield Foods, Inc. (SFD) reported in June a net loss in its fourth quarter, compared to profit in the same quarter last year, negatively impacted by poor performance in the International and Hog Production segments, which resulted in lower sales and higher expenses mainly on high feed costs. However, the loss per share was narrower than analysts' expectation. Net loss was $78.8 million or $0.55 per share, compared to net income of $2.4 million or $0.02 per share last year. Quarterly sales edged down a tad to $2.85 billion from $2.87 billion a year ago. Smithfield added that it is initiating a further reduction of 3% of U.S. sow herd, effective immediately.
Tyson's Segmental Details
Revenues for chicken products totaled $2.42 billion or 36.3% of net sales, higher than $2.26 billion in the year-ago quarter. Volumes increased 5.0%, and average price change was 2.0% higher. Operating margins grew to a positive 5.9% from a negative 1.3% last year, reflecting increased sales volume, and higher average sales prices.
Beef revenues declined to $2.73 billion or 41.0% of net sales, from $2.98 billion in the prior-year quarter. Volumes increased 2.6%, while average price change was 10.7% lower. Operating margins for the segment increased 210 basis points to 2.4% from last year' 0.3%, helped by lower average live prices, partially offset by lower average sales prices.
Revenues for pork products decreased to $839 million or 12.6% of net sales, from $927 million in the year-ago quarter. Volumes edged up 0.7%, while average price change was 10.1% lower. Segment operating margins dropped 280 basis points to 3.3% on lower average live prices, offset by lower average sales prices.
Prepared food revenues totaled $673 million or 10.1% of net sales, marginally lower than $683 million in the same quarter last year. Volumes edged up 0.4%, while average price change was 1.9% lower. Operating margins for the segment surged 460 basis points to 5.9%, due to lower raw material costs, partially offset by lower average sales prices.
Other Metrics
Operating income for the third quarter climbed to $276 million from $45 million in the year-ago quarter, and operating margin also surged 340 basis points to 4.1% from the year-ago quarter's 0.7%.
Gross profit for the quarter was $470 million, sharply higher than $259 million in the prior-year quarter, and gross profit margin also surged 330 basis points to 7.1% from last year's 3.8%.
Selling, general and administrative expenses declined to $192 million from $214 million in the comparable quarter a year ago. The company ended the third quarter with cash and cash equivalents of $845 million, compared to $55 million at end of the prior-year quarter.
Nine-Month Highlights
For the nine-month period, Tyson Foods reported a net loss of $82 million or $0.22 per share, compared to net income of $38 million or $0.11 per share in the prior-year period. Loss from continuing operations for the period was $81 million or $0.22 per share, compared to income from continuing operations of $41 million or $0.12 per share in the year-ago period.
Sales for the year-to-date period edged down a tad to $19.49 billion from $19.66 billion in the same period last year.
Looking ahead…………
"Soft demand for protein is likely to make the fourth quarter more challenging than the third quarter, but I'm feeling much better about our position than I would be if we were sitting on a lot of inventory. Overall, I am very pleased with the direction we're headed and with the attitude of our team members to get the job done,'' Tollett added. Stock Quote
TSN closed Friday's regular trading session at $11.43, up $0.22 on a volume of 8.91 million shares, sharply higher than the three-month average volume of 4.74 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.