Tyson Foods, Inc. (NYSE:TSN) Q2 2015 Earnings Conference Call Transcript

May 04, 2015 • 09:00 am ET

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Tyson Foods, Inc. (NYSE:TSN) Q2 2015 Earnings Conference Call Transcript

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Presentation
Executive
Dennis Leatherby

to be around 415 million, prior to considering any changes in our stock price which would impact the dilution from our tangible equity units.

Our priorities for the significant cash flows that our operations will generate are for continued rapid deleveraging and strengthening of our balance sheet, a sustained focus on disciplined capital allocations to drive long-term shareholder value, creating incremental debt capacity to fund acquisitions to fulfill our growth strategies and return cash to shareholders through share repurchases and dividends, all while maintaining plenty of liquidity.

In closing, our Q2 results continue to demonstrate the value of our diversified business model. With the addition of Hillshire valuing up our portfolio along with the synergies we expect to capture, Prepared Foods is expected to finish strong with margins above 8% for the remainder of fiscal 2015. Our Chicken segment has delivered more than $1 billion in operating income over the past 12 months and should produce an operating margin of approximately 11% for fiscal 2015. Although our Beef segment has faced volatile market conditions this year, we believe the worst is behind us. We expect our Beef segment to be profitable in fiscal '15 but below '14 results while our Pork segment is projected to operate in its normalized range for the year.

Despite a number of headwinds coming at us, we have a great team which gives me confidence we will deliver strong results in the second half of the year to not only meet our guidance of $3.30 to $3.40 adjusted earnings per share, but also grow EPS by at least 10% in fiscal 2016.

That concludes our prepared remarks. Operator, we're ready to begin the Q&A.