Tyson Foods profit beats estimates on strength in chicken business

Tyson Foods Inc., frozen chicken nuggets are displayed in the freezer at a Little Rock, Ark., grocery store. (AP Photo/Danny Johnston)

Tyson Foods reported better-than-expected quarterly earnings on Monday, as rising chicken sales helped counter a sharp drop in demand for high-priced beef.

Shares of the company, which houses brands such as Ball Park and Hillshire Farm, were up about two per cent in premarket trading.

Protein-hungry consumers have shifted toward buying more affordable types of meat, such as chicken and pork, as beef prices have set records.

Years of drought have curtailed U.S. cattle supplies, pushing up beef prices and squeezing processor margins as rising livestock costs outpace gains from higher selling price.

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The company expects an adjusted operating loss of US$350 million to $500 million in its beef business during fiscal 2026, compared with a loss of $250 million to $500 million forecast earlier.

Beef sales volumes sank 13.1 per cent for the second quarter, while prices climbed 11.5 per cent.

The unit posted an adjusted operating loss of $202 million, compared with a loss of $113 million a year earlier, while its adjusted operating margin fell 3.9 per cent. Revenue rose slightly, helped by pricing.

In November, U.S. President Donald Trump accused meat-packing companies of driving up beef prices through manipulation and collusion and ordered the Department of Justice to investigate.

Tyson raised fiscal 2026 income forecast for chicken business to $1.9 billion to $2.05 billion, from $1.65 billion to $1.9 billion projected earlier.

Quarterly chicken volumes rose 1.7 per cent, while adjusted operating margin climbed 12.2 per cent.

Tyson posted adjusted earnings of 87 cents per share for the second quarter, topping analysts’ average estimate of 78 cents, according to data compiled by LSEG.

Total quarterly sales increased 4.4 per cent to $13.65 billion, edging past analysts’ estimate of $13.61 billion.

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The Springdale, Arkansas-based company reaffirmed annual sales outlook, but raised adjusted operating income forecast to $2.2 billion to $2.4 billion, from a prior projection of $2.1 billion to $2.3 billion.

(Reporting by Tom Polansek in Chicago and Neil J Kanatt in Bengaluru; Editing by Shilpi Majumdar)