The biggest meat processor in the United States, the Tyson Foods Corp posts its 2015 profit forecast, which could surpass Wall Street’s estimate due to higher beef prices, including lower feed prices as well as its recent acquisition of Hillshire Brands, a sausage seller.
Company shares were also posted higher than expected for the current quarter, up by more than 5% at midday.
In the current quarter, beef prices went up by 21.5% due to tight supplies, while pork prices went up by 16.5%, according to Tyson.
Company CEO Donnie Smith said that the drop in gas price recently could allow consumers for more free money so as to visit restaurants, including the continuation of low-priced chicken products.
The company also estimated 42 billion dollar revenue for 2015 as well as a 4 billion revenue estimate from its recent acquisition.
This year, CEO Smith estimates about 3% increase in chicken supplies. Additionally, chicken sales jumped during the quarter, although prices dropped 4% as feed prices declined.
Chinese demands, including KFC restaurant chains remained weak due to a meat scandal linking a McDonald’s Corp’s meat supplier. Smith said demands in China remains in a holding pattern.
Company’s quarterly net income was at 137 million dollars, nearly halved, or 35-cent a share that ended September 27. Tyson earnings except other items and acquisition charges was at 87-cent per share, surpassing the analysts’ average forecast of 76-cents per share.
At midday, Tyson shares jumped 5.3% at 39.09 dollars.