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November 19, 2014

Tyson Shares Supply Projections

Tyson Foods, which derives almost 15% of sales from Wal-Mart, forecast adjusted profit of $3.30 to $3.40 per share for the fiscal year ending September 2015. Analysts, on average, expected a profit of $3.33 per share. Tyson also forecast 2015 revenue of $42B, including an expected $4B in revenue from the Hillshire acquisition. Tyson said tight supplies sent average beef prices up 21.5% in the latest quarter, while pork was up 16.5%. CEO Donnie Smith said that trade-down to lower-priced chicken products should continue, and the recent drop in prices at the gas pump could free up more money for restaurant visits. Fed cattle supplies are expected to shrink about 4% in 2015. Those supplies are forecast to be flat to down about 1% in 2016, Smith said. Hog supplies, hard hit by the deadly Porcine Epidemic Diarrhea virus (PEDv) in 2014, are expected to expand 2%-3% this year, Smith said. "It appears there will be fewer instances of PEDv," he said. He also forecast an increase of roughly 3% in chicken supplies this fiscal year. Chicken sales were up in the latest quarter, but prices fell 4% as feed costs declined.


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