February 7, 2022
Tyson Foods to announce strong results, strengthening concerns of rising meat prices
Tyson Foods is projected to announce strong positive results for its beef segment in a quarterly earnings report, as the Biden administration's criticism of rising meat profits and increased profits for major meatpackers grows, Reuters reported.
Analysts said Tyson Foods soaring operating margins could draw unwelcome interest from the Biden administration.
US President Joe Biden's administration said it will spend US$1 billion and propose new regulations to address a lack of meaningful competition in the meat processing sector.
Senior equity research analyst for CFRA Research, Arun Sundaram, projects Tyson Foods' beef unit margins to hit 16% in October to December 2021, the company's first quarter financial year, thanks to rising prices for meat. The margins were 13.2% the year prior when the beef unit announced quarterly sales of nearly US$4 billion.
Refinitiv Eikon said analysts project Tyson Foods' quarterly revenue from all its units including beef to hit US$12.177 billion, 16% higher compared to the year prior.
Sundaram said Tyson Foods is trapped between its responsibility to increase shareholder profits and the risk of more government scrutiny.
In the quarter that ended October 2, 2021, Tyson Foods reported its beef unit's operating margins were 22.9% as it said average beef prices rose 32.7%.