TSN Tyson Foods

Tyson Foods Inc. posted better-than-expected revenue in its latest quarter, helped by chicken and prepared-foods sales, though revenue at its beef and pork segments recorded drops of 7.5% and 25%, respectively.

Adjusted profit came in below analysts' forecasts.

Looking ahead to next year, the company said it expects sales of $41 billion in the 2016 fiscal year, above expectations of analysts surveyed by Thomson Reuters who expect $40.4 billion.

Tyson and other beef processors have been buffeted by yearslong contraction in the U.S. cattle herd due to drought in the southern Plains. There had been hope that supply constraints seen in the prior quarter would ease in the latest three-month period as feedyards sold cattle that were kept on feed for longer periods.

Overall, the company posted a profit of $258 million, or 63 cents a share, up from $137 million, or 35 cents a share, a year earlier. Excluding certain items, earnings were 83 cents, down from 87 cents.

Revenue climbed 4% to $10.5 billion. Analysts surveyed by Thomson Reuters forecast per-share earnings of 88 cents a share on revenue of $10.3 billion.

In the chicken segment, adjusted feed costs decreased $130 million during the latest quarter. The segment registered a sales volume climb on stronger demand, the company said.

Growth in the prepared food segment was driven by the acquisition of Hillshire Brands, the maker of Jimmy Dean sausage.

The beef segment produced a $70 million hit on profit in the latest quarter related to mark-to-market open derivative positions and lower-of-cost-or-market inventory adjustments as a result of a sharp decline in live cattle futures during September.

During the quarter, the segment posted a $33 million operating loss, down from a $153 million profit a year earlier.

The adjusted average price in the pork segment tumbled 23%. Live hog supplies increased, which drove down livestock cost and adjusted average sales price. U.S. hog herds rebounded faster than expected this year from a virus that killed millions of pigs beginning in the spring of 2013, resulting in a supply bulge.

Last week, Tyson announced plans to close two aging prepared-food plants, in the face of prohibitive renovation costs and changing demand. About 880 workers would be affected by the closures of the plants in Jefferson, Wis., and Chicago.

In August, the company announced it was closing a 400-person beef-processing plant in Iowa, citing declining U.S. cattle herds.

The closures come as Tyson continues to remake itself after its 2014 acquisition of Hillshire Brands Co. Shortly after the announcement of the acquisition, Tyson announced in July 2014 that it was closing three prepared-food plants.

In recent quarters, revenue growth in the prepared-food division has led the company's top-line growth, primarily as a result of the Hillshire acquisition. In the latest quarter the prepared foods division saw sales climb 60%.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

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(END) Dow Jones Newswires

November 23, 2015 09:15 ET (14:15 GMT)

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