Tyson Foods, one of the world largest producers of beef, pork and chicken, recently announced solid financials for its fiscal 2016 third quarter ended July 2. Revenues decreased 6.6% y-o-y to $9.403 bn but surpassed consensus estimate of $9.23 bn. Sales volume dipped 2.7%, while average sales price (ASP) went down 4.1%. At the same time operating income jumped 36.2% to $767 mn on the back of improved operational execution and lower feed ingredient costs, and operating margin expanded 260 basis points to 8.2%. To note, the company showed margin improvement in all segments, with Chicken segment operating margin reaching a record 13.9%. Adjusted earnings per share surged 51% to $1.21 comfortably beating analysts’ average projection of $1.07. During the reported quarter, Tyson repurchased 6.6 mn shares for $425 mn. A quarterly dividend was 15 cents per share, which offers annualized dividend yield of 0.8%.For fiscal 2016, Tyson maintained revenues forecast at approximately $37 bn but raised annual earnings estimate to $4.40-4.50 per share from USD 4.20-4.30 per share expected earlier. The company also issued fiscal 2017 guidance and forecasts revenues to increase 1% on volume growth partially offset by the impact of lower beef, pork and chicken prices. For fiscal 2017, the company expects domestic protein production (chicken, beef, pork and turkey) to increase approximately 2-3% from the fiscal 2016 levels. Tyson also expects to realize synergies of approximately $700 mn in fiscal 2017 from the acquisition of Hillshire Brands.Tyson’s shares, I believe, are well position to continue growth, with medium-term target at $82. $TSN, Tyson Foods, Inc. / 1440