Tyson Foods, Inc. (NYSE:TSN) Q4 2017 Earnings Conference Call Transcript
Nov 13, 2017 • 09:00 am ET
trial by fire, it was you in 2008, we remember. Just curious for you or whoever it's appropriate. Tyson's highlighting a few new tailwinds today for fiscal 2018. You're guiding now to over $200 million in synergies and savings versus the prior $200 million. You see around $100 million less in feed costs than you did the last time you guided. And I think if I'm right, your EBIT guidance for the other segment is about $30 million better than last time, but you're not raising total EPS guidance, you're just maintaining it. So, what I'm really trying to get is a sense of whether this means you're just being conservative on EPS given that it's very early in the year or if there are maybe some tangible incremental headwinds I guess we should be thinking about too?
Ken, I'll start and then maybe Dennis can chime in here. And absolutely I agree with you that Dennis did enter the equation in a trial by fire and he's done a nice job. So, it was certainly early in the year. I mean we're just out of the box, Q1 looks good, but we have to sort of stay where we are. Absolutely, things look good. We continue to say that absent a shock to the system, we're going to be in a nice position for 2018. And we also just want to make sure that we emphasize, we are in a growth mode so we're going to continue to invest and make sure that we're doing the right things for growth. But the objective is consistent, predictable, sustainable growth, topline and bottom line. So, we're not going to be getting out ahead of ourselves and certainly we're making investments. We're making investments in CapEx and we guide to that. The year looks good.
The only thing I would add, Ken, is remember our Q2 which ends in March is always very erratic with weather patterns and order patterns never the same from year-to-year. So, that's why we always start out pretty measured in our approach.
And then a quick follow-up. You said that 1Q is off to a very good start. I'm paraphrasing a little bit there. But a couple of things we've noticed. You guys talked about the Pork business and the industry margins have been weaker, you said that's in line with your guidance, but it's still weaker than it was sequentially. And Beef margins for the industry have weakened as well. And I know again it may not be the same for you, but you've also seen some chicken prices drop. Now again you may get the offset with boneless, skinless. But in general, I would have thought 1Q would have been a little not weak at all, but maybe you wouldn't have been quite as bullish on it as what we're seeing. So I'm just trying to get a sense as we dig into the quarter what you're seeing so far in the first half of