Tyson Foods (TSN) - Get Report posted stronger-than-expected third quarter earnings Monday while noting that COVID-19-related costs will impact output volumes at the world's biggest meat producer until at least 2021.
Tyson said adjusted earnings for the three months ending in June, the group's fiscal third quarter, came in at $1.40 per share, down 4.8% from the same period last year but firmly ahead of the Street consensus forecast of 94 cents per share. Group revenues, Tyson said, fell 8% to $10 billion, missing analysts' estimates of a $10.5 billion tally.
Tyson said it absorbed around $340 million in coronavirus-related costs, including those linked to plant closures, safety measures, testing and product downgrades.
“Without a doubt, our third fiscal quarter was one of the most volatile and uncertain periods I’ve seen during my time in the industry,” said CEO Noel White. “However, our commitment to team member health and safety and investments in operations and portfolio strategy effectively positioned us to weather unprecedented COVID-19 marketplace volatility while allowing us to support our farmers, ranchers and producers and meet our customers’ needs.”
“Within each of our segments, we absorbed higher-than-normal operating costs related to COVID-19. Nonetheless, Tyson delivered strong results during the third quarter led by strength in our Beef and Pork segments," he added. "Despite short-term challenges, we’re maintaining a clear focus on the long term. Our fourth quarter is off to a solid start, and while COVID-19 has been disruptive, we have a strong long-term outlook for Tyson Foods.”
Tyson Foods shares were marked 2.6% higher in early trading following the earnings release to change hands at $62.73 each, trimming their year-to-date decline to around 50%. .
Tyson also said CEO White, who has run the group since September 2018, while step down in October in favor of Dean Banks, a Silicon Valley veteran who joined the Tyson board in 2017.