(Reuters) -Tyson Foods raised annual revenue forecast and posted better-than-expected results for the third quarter on Monday, betting on resilient demand for meat products, especially chicken, sending its shares rising nearly 5% before the bell.
Profit margins jumped in Tyson's chicken and prepared foods businesses, while they worsened in its beef segment.
Tight U.S. cattle supplies continue to force Tyson and other meatpackers to pay more money to buy livestock to slaughter into beef.
However, the
Springdale, Arkansas-based company has seen sustained demand for frozen meat and ready-to-eat food as consumers increasingly opted to cook meals at home in the face of growing uncertainties about tariffs and economic growth.
The Ball Park hotdogs maker expects fiscal 2025 revenue to grow between 2% and 3%, compared with its prior forecast of flat-to-up 1%.
Tyson said it expects its chicken business to earn an annual adjusted operating income of $1.3 billion to $1.4 billion, up from its previous forecast of $1 billion to $1.3 billion.
Its beef business — the largest product segment by sales — is expected to lose $375 million to $475 million in fiscal 2025, compared with the previous loss estimate of $200 million to $400 million.
Volumes in Tyson's beef segment were down 3.1% during the quarter ended June 28, but sales grew 6.9% as prices jumped 10%.
The segment had an adjusted operating loss of $151 million, including a goodwill impairment charge of $343 million. That compares with losses of $69 million a year earlier.
Sales in the chicken segment rose 3.5%, with volumes up 2.4%.
The company's quarterly net sales rose 4% to $13.88 billion, compared with analysts' average estimate of $13.56 billion, according to data compiled by LSEG.
Tyson earned 91 cents per share, on an adjusted basis, while the estimate was 78 cents.
(Reporting by Neil J Kanatt in Bengaluru and Tom Polansek in Chicago; Editing by Shilpi Majumdar)
