Welcome to the Tyson Foods Quarterly Investor Earnings Call. Participants will be in a listen-only mode until the question-and-answer session of today's conference. (Operator Instructions) This call is being recorded. If you object, you may disconnect now.
I will now turn the call over to Jon Kathol, VP of IR. Sir, you may begin.
Good morning, and thank you for joining us for Tyson Foods conference call for the third quarter of the 2015 fiscal year. On today's call are Donnie Smith, President and CEO and Dennis Leatherby, EVP and CFO.
(Forward-looking Cautionary Statements)
This morning, we will be referring to our third quarter adjusted operating income and EPS. The company uses non-GAAP results such as adjusted EPS, adjusted operating margin and adjusted operating income to provide investors with a better understanding of the company's operating performance by excluding the impact of certain nonrecurring items affecting comparability. Please refer to today's news release for a full reconciliation of our GAAP to adjusted results.
As always, we'll have a Q&A session following our prepared remarks. To ensure we get to as many of you as possible, please limit yourself to one question and one follow-up, and then get back in the queue for any additional questions. I'll now turn the call over to Donnie Smith.
Good morning, everyone. Thanks for joining us today. Well, by now you've seen the results in our press release, so I'll start by saying that there were four areas where we over delivered and one that was a negative. The four positives are that synergies are ahead of expectations, Prepared Foods exceeded forecast, the Chicken segment exceeded forecast, and cash flow was $864 million allowing us to reduce net debt by 688 million. The one negative was that Beef under-delivered our expectations by $84 million. We could not offset the quick and substantial impact of Beef in the quarter despite the significant progress across the rest of the portfolio, and I'll talk more about that in my commentary on the operating segment.
Synergy capture from the integration of Hillshire Brands is going extremely well. We have raised our estimates last quarter to more than 250 million this fiscal year, and now we're on track for about $300 million, largely driven by operational improvements in the Tyson legacy Prepared Foods operations. The majority of the synergies, 79 million for the quarter fell within the Prepared Foods segment, where we continue to rewrite the cost structure of the business.
In the third quarter, Prepared Foods produced record adjusted operating income of 197 million, with an adjusted 10.9% return on sales. Volume was up 77% reflecting the addition of Hillshire Brands, and average sales price was up 13%.
The fundamentals in this segment remains strong and we continue to focus on a long-term growth and brand building. We anticipate our retail margins will moderate a bit in the fourth quarter as we spend against the national launches of Hillshire Snacking and Ball Park jerky, as well as increased MAP spending
President and CEO
EVP and CFO
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