While the markets overall have had a terrible Monday, there have been a few major exceptions. With trade worries clouding over the minds of investors once again following news of a further tariff on Chinese goods, major indexes have plummeted drastically.
All three major stock indexes fell by around 3 percent, with the Dow Jones declining 767 points, around 2.9 percent, while both the S&P 500 and the NASDAQ dropped by 3 and 3.5 percent respectively.
Tyson Foods (NYSE: TSN) was among the biggest winners in today among the large-cap stocks, rising as much as 8 percent over the course of the day in response to good Q3 financial results.
Tyson Foods reported better-than-expected quarterly results on Monday and doubled down on their prediction that they will remain profitable thanks in no small part to the fatal hog disease spreading across China at the moment.
A deadly epidemic of African swine fever has ended up in a drastic culling Chinese pig herds, and with the country being the largest consumer of pork in the world, this has led to a significant increase in demand from American pork as well as other suppliers. Food companies like Tyson are in an excellent position to take advantage of this.
The company ended up reporting earnings per share of $1.47, which ended up beating the average analyst estimate of $1.45 per share. Net income rose to $767 million in the quarter, a significant increase from the $541 million seen around the same time last year. Overall, total sales rose by 8.3 percent, with meat products leading the way for the company.
“The African Swine Fever outbreak continues to take its toll on hog supplies in Asia; however, we have not yet experienced significant benefits to our Pork, Chicken or Beef segments. Given the magnitude of the losses in China’s hog and pork supplies, the impending impact on global protein supply and demand fundamentals is likely to be a multi-year event,” said Noel White, Tyson’s CEO and President. “We are maintaining our guidance of adjusted earnings of $5.75-6.10 per share for fiscal 2019. With a strong export environment expected to continue into next year, we’re optimistic about the earnings potential for each of our segments in fiscal 2020.”
In response to the news, shares hit a record high of $87.27 per share. While highly fatal and contagious among pigs, African swine fever is harmless to humans and currently hasn’t spread yet to the United States.
However, many industry experts have warned in the past that America needs to be careful about a potential spread to the states, which could end up destroying a significant portion of the country’s pork supply.
Tyson Foods Company Profile
Tyson Foods is the largest U.S. producer of processed chicken and beef. It’s also a large producer of processed pork and protein-based products under the brands Jimmy Dean, Hillshire Farm, Ball Park, Sara Lee, Aidells, and State Fair, to name a few. Tyson sells 90% of its products through various U.S. channels, including retailers, foodservice distributors, restaurants, and noncommercial foodservice establishments, such as schools, healthcare facilities, and military bases. In addition, 10% of the company’s revenue comes from exports to Canada, Mexico, Brazil, Europe, China, and Japan. – Warrior Trading News
