Tyson Foods Inc., the largest U.S. meat processor, reported better-than-expected revenue and profit on Thursday on stronger sales of beef products and higher-margin prepared foods.
Shares of the maker of Ball Park hotdogs and Jimmy Dean sausages rose 5 percent to $77.14 in premarket trading.
The company forecast more than $300 million in savings in fiscal 2018 related to the overhaul of U.S. tax laws, with $100 million in bonuses paid to employees.
Tyson has sought to ensure higher profits by investing in prepared meals and heat-and-serve items such as sandwich supplier AdvancePierre Foods, which it bought in 2017 for about $3.2 billion.
The Springdale, Arkansas company raised its fiscal 2018 forecast to between $6.55 and $6.70, which includes a benefit from a lower tax rate, from a prior forecast of between $5.70 and $5.85
An increase in demand for beef and chicken products have helped Tyson and other meat processors such as Smithfield Foods in recent quarters.
Sales in the beef business, the company’s biggest in terms of sales, rose 10.1 percent in the first quarter, while its prepared foods segment saw an increase in sales of 21 percent.
Net income attributable to the company nearly tripled to $1.63 billion, or $4.40 per share, in the quarter ended Dec. 30.
Excluding items, the company earned $1.81 per share, much above the average analyst estimate of $1.50, according to Thomson Reuters I/B/E/S.
Tyson’s net revenue rose 11.4 percent to $10.23 billion. Analysts on average had expected $9.87 billion.