Tyson Foods (TSN 62.00, -1.33) has given up 2.1% in pre-market after reporting earnings that were just below market expectations.
The food company delivered below-consensus second quarter earnings of $1.01 per share on revenue of $9.08 billion, which declined 0.9% year-over-year, but was just ahead of expectations.
Operating margin declined to 6.9% from 7.7% one year ago due to declines in most segments. The Beef segment was an exception, as operating margin improved to 3.6% from 1.3%. Beef sales volume declined 1.1% with average selling prices falling 3.1%, which resulted in a 4.2% decline in segment revenue to $3.49 billion. Segment operating income jumped to $126 million from $46 million one year ago, as the company maximized revenue relative to the decline in live fed cattle costs.
Pork sales volume declined 1.3% year-over-year, but average selling prices jumped 10.9%, leading to a 9.4% jump in segment revenue to $1.30 billion. Segment operating income ticked up to $141 million from $140 million while operating margin fell to 10.8% from 11.8% one year ago.
Chicken sales volume decreased 2.0%, but average selling prices increased 4.3%, resulting in a 2.2% year-over-year increase in segment revenue to $2.80 billion. Segment operating income fell to $233 million from $347 million while operating margin contracted to 8.3% from 12.7%. Fires at two chicken plants weighed on second quarter results.
Prepared Foods volumes decreased 2.1% and average selling prices declined 0.8%. Segment revenue fell 2.9% to $1.75 billion while segment operating income declined to $139 million from $197 million. Operating margin declined to 7.9% from 10.9% one year ago. Ongoing challenges in the company's pizza toppings and ingredients meats businesses contributed to the declines.
Other volumes increased 3.0% while average selling prices decreased 7.8%. Segment revenue declined 4.7% to $82 million.
The industry heavyweight reaffirmed its guidance for the full year, expecting earnings between $4.90 per share and $5.05 per share.