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Everything You Must Know Before Tyson Foods' (TSN) Q1 Earnings
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Tyson Foods, Inc. (TSN - Free Report) is likely to report growth in the top line when it releases first-quarter fiscal 2021 numbers on Feb 11. The Zacks Consensus Estimate for revenues is pegged at approximately $11.1 billion, which suggests a rise of 2.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the bottom line has gone up 3.3% in the past 30 days to $1.58 per share, which however indicates a drop of 4.8% from the year-ago quarter’s reported figure. Notably, this meat product giant’s bottom line has outpaced the Zacks Consensus Estimate by 57.4% in the last reported quarter and it has a trailing four-quarter earnings surprise of 18.6%, on average.
Key Factors to Note
The company has been gaining from rising demand in its retail channel, thanks to increased at-home consumption amid the pandemic. In fourth-quarter fiscal 2020, the company’s retail core business lines saw share growth for the ninth consecutive time. In fact, given the rising demand, the company has also shifted part of its foodservice production to concentrate on retail. Management expects to see elevated at-home dining in fiscal 2021, which is likely to aid retail volumes. Another channel performing well for Tyson Foods is e-commerce, which saw its sales more than double in the fourth quarter and rise 99% in fiscal 2020 as more consumers are buying online amid the pandemic. Management expects continued strength in the e-commerce channel. Apart from these, Tyson Foods is benefiting from its brand strength, robust geographical reach, and the ability to manufacture locally in its international markets and cater well to the evolving global demand.
Tyson Foods, Inc. Price, Consensus and EPS Surprise
Though the company is seeing increased retail demand, foodservice demand remains affected by below normal operations at schools and cafeterias. These factors along with increased staff absenteeism amid the pandemic have been elevating costs and complexities regarding the company’s operations in the United States and Europe. During the fourth quarter of fiscal 2020, the company incurred $200 million as direct incremental expenses associated with COVID-19, which put pressure on results to an extent. Additional COVID-19 costs amounted to $540 million for fiscal 2020. These include escalated costs related to workers’ health and production facility downtimes, such as personal protection equipment, sanitization of production facilities, testing for coronavirus and product downgrades, to name some.
Apart from these, certain indirect COVID-19 costs like raw materials, transportation, underutilization and reconfiguration of plant, premiums offered to cattle producers, and discounts on pricing dented results. Management expects COVID-19 costs worth roughly $330 million in fiscal 2021. The company on its last earnings call said that it expects to continue facing pandemic-related hurdles in the first half of fiscal 2021. Tyson Foods expects food and protein demand to shift among different sales networks and witness short-term hiccups amid the pandemic. These headwinds are likely to put pressure on volumes in fiscal 2021 that also raise concerns regarding the quarter under review. Nonetheless, the company expects to see a gradual recovery in foodservice volumes in the fiscal.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Tyson Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tyson Foods currently has a Zacks Rank #3 and an Earnings ESP of +0.16%.
Other Stocks With Favorable Combinations
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.
Newell Brands (NWL - Free Report) has an Earnings ESP of +1.30% and a Zacks Rank #3, currently.
Monster Beverage (MNST - Free Report) has an Earnings ESP of +21.81% and a Zacks Rank #3, at present.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time. See 8 breakthrough stocks now>>
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Everything You Must Know Before Tyson Foods' (TSN) Q1 Earnings
Tyson Foods, Inc. (TSN - Free Report) is likely to report growth in the top line when it releases first-quarter fiscal 2021 numbers on Feb 11. The Zacks Consensus Estimate for revenues is pegged at approximately $11.1 billion, which suggests a rise of 2.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the bottom line has gone up 3.3% in the past 30 days to $1.58 per share, which however indicates a drop of 4.8% from the year-ago quarter’s reported figure. Notably, this meat product giant’s bottom line has outpaced the Zacks Consensus Estimate by 57.4% in the last reported quarter and it has a trailing four-quarter earnings surprise of 18.6%, on average.
Key Factors to Note
The company has been gaining from rising demand in its retail channel, thanks to increased at-home consumption amid the pandemic. In fourth-quarter fiscal 2020, the company’s retail core business lines saw share growth for the ninth consecutive time. In fact, given the rising demand, the company has also shifted part of its foodservice production to concentrate on retail. Management expects to see elevated at-home dining in fiscal 2021, which is likely to aid retail volumes. Another channel performing well for Tyson Foods is e-commerce, which saw its sales more than double in the fourth quarter and rise 99% in fiscal 2020 as more consumers are buying online amid the pandemic. Management expects continued strength in the e-commerce channel. Apart from these, Tyson Foods is benefiting from its brand strength, robust geographical reach, and the ability to manufacture locally in its international markets and cater well to the evolving global demand.
Tyson Foods, Inc. Price, Consensus and EPS Surprise
Tyson Foods, Inc. price-consensus-eps-surprise-chart | Tyson Foods, Inc. Quote
Though the company is seeing increased retail demand, foodservice demand remains affected by below normal operations at schools and cafeterias. These factors along with increased staff absenteeism amid the pandemic have been elevating costs and complexities regarding the company’s operations in the United States and Europe. During the fourth quarter of fiscal 2020, the company incurred $200 million as direct incremental expenses associated with COVID-19, which put pressure on results to an extent. Additional COVID-19 costs amounted to $540 million for fiscal 2020. These include escalated costs related to workers’ health and production facility downtimes, such as personal protection equipment, sanitization of production facilities, testing for coronavirus and product downgrades, to name some.
Apart from these, certain indirect COVID-19 costs like raw materials, transportation, underutilization and reconfiguration of plant, premiums offered to cattle producers, and discounts on pricing dented results. Management expects COVID-19 costs worth roughly $330 million in fiscal 2021. The company on its last earnings call said that it expects to continue facing pandemic-related hurdles in the first half of fiscal 2021. Tyson Foods expects food and protein demand to shift among different sales networks and witness short-term hiccups amid the pandemic. These headwinds are likely to put pressure on volumes in fiscal 2021 that also raise concerns regarding the quarter under review. Nonetheless, the company expects to see a gradual recovery in foodservice volumes in the fiscal.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Tyson Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tyson Foods currently has a Zacks Rank #3 and an Earnings ESP of +0.16%.
Other Stocks With Favorable Combinations
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.
Service Corporation (SCI - Free Report) currently has an Earnings ESP of +3.68% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Newell Brands (NWL - Free Report) has an Earnings ESP of +1.30% and a Zacks Rank #3, currently.
Monster Beverage (MNST - Free Report) has an Earnings ESP of +21.81% and a Zacks Rank #3, at present.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>