Tyson Foods, Inc. (TSN) has reported a 21.30 percent fall in profit for the quarter ended Apr. 01, 2017. The company has earned $340 million, or $0.92 a share in the quarter, compared with $432 million, or $1.10 a share for the same period last year. On an adjusted basis, earnings per share were at $1.01 for the quarter compared with $1.07 in the same period last year. Revenue during the quarter went down marginally by 0.95 percent to $9,083 million from $9,170 million in the previous year period. Gross margin for the quarter contracted 137 basis points over the previous year period to 11.53 percent. Total expenses were 93.71 percent of quarterly revenues, up from 92.32 percent for the same period last year. That has resulted in a contraction of 139 basis points in operating margin to 6.29 percent.
Operating income for the quarter was $571 million, compared with $704 million in the previous year period.
However, the adjusted operating income for the quarter stood at $623 million compared to $704 million in the prior year period. At the same time, adjusted operating margin contracted 82 basis points in the quarter to 6.86 percent from 7.68 percent in the last year period.
"We generated record adjusted EPS in the first half of the fiscal year," said Tom Hayes, president and chief executive officer of Tyson Foods. "Despite seasonal challenges typical of our second quarter and one-time events, adjusted earnings per share was up 17% over the first half of fiscal 2016."
For fiscal year 2017, the company expects diluted earnings per share to be in the range of $4.90 to $5.05 on adjusted basis.
Operating cash flow declines
Tyson Foods, Inc. has generated cash of $982 million from operating activities during the first half, down 11.13 percent or $123 million, when compared with the last year period. The company has spent $478 million cash to meet investing activities during the first six months as against cash outgo of $352 million in the last year period.
The company has spent $609 million cash to carry out financing activities during the first six months as against cash outgo of $1,189 million in the last year period.
Cash and cash equivalents stood at $243 million as on Apr. 01, 2017, down 4.33 percent or $11 million from $254 million on Apr. 02, 2016.
Working capital declines
Tyson Foods, Inc. has witnessed a decline in the working capital over the last year. It stood at $1,911 million as at Apr. 01, 2017, down 17.52 percent or $406 million from $2,317 million on Apr. 02, 2016. Current ratio was at 1.62 as on Apr. 01, 2017, down from 1.89 on Apr. 02, 2016.
Cash conversion cycle (CCC) has decreased to 14 days for the quarter from 30 days for the last year period. Days sales outstanding were almost stable at 16 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 17 days for the quarter compared with 33 days for the previous year period. At the same time, days payable outstanding was almost stable at 18 days for the quarter, when compared with the previous year period.
Debt moves up marginally
Tyson Foods, Inc. has witnessed an increase in total debt over the last one year. It stood at $6,448 million as on Apr. 01, 2017, up 1.56 percent or $99 million from $6,349 million on Apr. 02, 2016. Total debt was 28.54 percent of total assets as on Apr. 01, 2017, compared with 28.20 percent on Apr. 02, 2016. Debt to equity ratio was at 0.66 as on Apr. 01, 2017, up from 0.65 as on Apr. 02, 2016. Interest coverage ratio deteriorated to 10.20 for the quarter from 11 for the same period last year.
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