Tyson Foods, Inc. (NYSE:TSN) Q4 2018 Earnings Conference Call - Final Transcript
Nov 13, 2018 • 09:00 am ET
Okay. We will now begin the question-and-answer session. (Operator Instructions) Ben Theurer, Barclays.
Congratulations on the strong EPS number. Now one of the questions I was having and looking at your guidance 2019, would you describe the outlook is somewhat conservative because it basically, I mean, midpoint adjusting for the one-timers and so on. It's like kind of calling for zero growth in earnings. So just to understand why you came up with somewhat a conservative guidance here. And then I have a follow-up.
Yes, Ben. This is Noel. I'll take the question. The outlook is as we see it today, Ben. So there's a lot of variables that are in place and it's really consistent with the past approach that we've taken based on everything as it stands today. Yes, however, that changes -- our outlook could change. And at this point, it looks like some of the headwinds and tailwinds that we face are in relative balance. Again profitability, profitable growth is a key focus or this team as we look into 2019.
The only thing I'd add, Ben, is just to say if you looked at last year, of course, the first half of the year was much better for Pork than the second half of the year. We're going to have to overcome that comparison as we enter the first part of the year (ph). So I'd say underscoring what Noel has emphasized here, this is the best estimate we have for the moment.
And as you said, actually Stewart, on pork would be my follow-up question. So late July, early August when you updated your guidance for 2018, the implications post then what we saw in Q3 was basically for a much worse environment on the pork side. I mean, implicitly you was basically guiding to a 0% margin in the fourth quarter. Now, you actually reported an almost 7%. Could you elaborate a little bit on what has changed, actually through the quarter than what you were expecting late July, early August, which triggered some sort of a meaningful reduction on that specific segment. So what has been better and what do you think, how is this going to evolve into 2019 fiscal for you?
Ben, this is Noel, I'll take the question. In July and August, there was a large number of variables that were in the market. We had a number of trade disputes that were taking place. We had some planned expansion in production capacities that didn't happen as quick as what we anticipated. And frankly, our exports continued to be very strong, very robust in light of all the trade disputes that you're reading about. So that's frankly continued as -- not only through Q4, but into Q1 as well. October was a little bit lighter than what we expected, but November, it's been a solid month for us.
Okay. So basically, actual was just -- it was -- it never got as bad as you initially expected.
I mean, I