(Reuters) -Tyson Foods beat Wall Street expectations for fourth-quarter results on Tuesday, as lower costs and strong demand for its pork and beef products helped offset slowdown in the chicken segment, sending its shares up 6% before the bell.
More people are cooking at home rather than dining out due to higher food prices, which is helping Tyson Foods that has been enjoying a rebound in demand for pork products after a decline in their prices compared to last year.
Tyson’s pork segment reported a 3.2% rise in fourth-quarter volumes, while prices fell 6.9%.
Volumes in the beef segment rose 3.7%, hinting to strong demand at a time when U.S. meat packers including Tyson Foods are facing short supply of beef, as producers remain unwilling to start rebuilding herds.
The United States saw its herd shrink to its smallest level in seven decades, following a standstill in herd expansion as dryness in weather and years of drought burned up pastures and forced farmers to send more cows to slaughter.
Tyson Foods posted an adjusted operating margin of 3.8% in the fourth quarter, compared with 1.8% a year earlier, helped by lower grain prices and a drop in raw material expenses such as cost of feed and livestock.
Adjusted earnings stood at 92 cents per share, above analysts’ estimates of 69 cents, according to data compiled by LSEG.
Tyson Foods’ net sales rose 1.6% to $13.57 billion, compared with the average analyst estimate of $13.39 billion.
However, slowing demand for chicken and lower pork prices prompted Tyson to forecast full-year revenue below Street expectations.
The company expects fiscal 2025 revenue to be between flat and down 1%. Analysts had expected 1.8% growth to $54.09 billion.
Sales in its chicken segment rose 2.3% in the fourth quarter, while prices were up 0.2%. Volumes in the segment dropped 0.7%, compared to a 0.4% fall seen in the previous quarter.
(Reporting by Neil J Kanatt and Ananya Mariam Rajesh in Bengaluru and Karl Plume and Heather Schlitz in Chicago; Editing by Shounak Dasgupta and Shinjini Ganguli)
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