Why Tyson Foods (TSN) Stock Is Lower This Morning

NEW YORK (TheStreet) -- Shares of Tyson Foods Inc.  (TSN) are down -7.57% to $39.42 after the company reported 2014 second quarter earnings

Its profit more than doubled, the result of selling more chicken combined with higher prices for beef and pork.

The company raised its full-year sales forecast, and said it expected sales of about $37 billion for the current fiscal year.

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That's above the average analyst estimates of $35.94 billion, according to Thomson Reuters I/B/E/S.

But Tyson warned that overall domestic protein production for the year ending September would decrease about 1% in part because of lower hog supplies.

It reaffirmed that grain supplies would increase in 2014, bringing feed costs down.

Net income increased to $213 million, or 60 cents per share, from $95 million, or 26 cents per share, a year ago, as revenue jumped 7.8% to $9.03 billion.

On average, analysts expected That Tyson would earn 63 cents per share on revenue of $8.84 billion, according to Thomson Reuters I/B/E/S.

TheStreet Ratings team rates TYSON FOODS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate TYSON FOODS INC (TSN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TSN's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 4.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 46.93% and other important driving factors, this stock has surged by 74.02% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TSN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • TYSON FOODS INC has improved earnings per share by 46.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TYSON FOODS INC increased its bottom line by earning $2.32 versus $1.68 in the prior year. This year, the market expects an improvement in earnings ($2.93 versus $2.32).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Food Products industry average. The net income increased by 46.8% when compared to the same quarter one year prior, rising from $173.00 million to $254.00 million.
  • You can view the full analysis from the report here: TSN Ratings Report
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