GAAP EPS of $2.51; Record Adjusted EPS of $2.60, up 17% from last year

GAAP Operating income of $1,553 million; Record Adjusted operating income up 8% to $1,605 million

GAAP EPS of $0.92; Adjusted EPS of $1.01 compared to $1.07 last year

GAAP Operating income of $571 million; Adjusted operating income of $623 million

Total company GAAP operating margin at 6.3%; Adjusted operating margin at 6.9%

Captured $173 million in total synergies; $29 million incremental synergies over Q2'16

Repurchased 2.1 million shares for $133 million, excluding shares repurchased to offset dilution from our equity compensation plan

Adjusted EPS guidance of $4.90-$5.05, representing a 12% increase from adjusted EPS of fiscal 2016

Acquisition of AdvancePierre Foods Holdings, Inc. expected to close during the third quarter of fiscal 2017

Beef - Sales volume increased for the six months of fiscal 2017 due to improved availability of cattle supply, stronger domestic demand for our beef products and increased exports. Sales volume decreased in the second quarter of fiscal 2017 due to a reduction in live cattle processed. Average sales price decreased due to increased availability of live cattle supply and lower livestock cost. Operating income increased due to more favorable market conditions as we maximized our revenues relative to the decline in live fed cattle costs, partially offset by higher operating costs.

Pork - Sales volume increased for the six months of fiscal 2017 due to strong demand for our pork products and increased exports. Sales volume decreased in the second quarter of fiscal 2017 as a result of balancing our supply with customer demand, partially offset by increased exports. Average sales price increased as domestic availability of products decreased due to strong exports. Operating income increased as we maximized our revenues relative to the live hog markets, partially attributable to stronger export markets and operational and mix performance, which were partially offset by higher operating costs.  

Chicken - Sales volume decreased in the six months and second quarter of fiscal 2017 due to operational disruptions from fires at two of our plants and decreased rendered product sales, partially offset by better demand for our chicken products. Average sales price increased for the six months and second quarter of fiscal 2017 as a result of sales mix changes. Operating income for the six months and second quarter of fiscal 2017 was negatively impacted by higher operating costs which included increased marketing, advertising and promotion spending, $23 million of incremental net costs and lower sales volume attributable to the two plant fires, and compensation and benefit integration expense of $30 million and $7 million for the six months and second quarter of fiscal 2017, respectively. Feed costs decreased $10 million and increased $10 million for the six months and second quarter of fiscal 2017, respectively.

Prepared Foods - Sales volume was up slightly for the six months of fiscal 2017 due to improved demand for our retail products, partially offset by declines in foodservice. Sales volume decreased in the second quarter of fiscal 2017 primarily as the result of declines in foodservice. Average sales price decreased for the six months of fiscal 2017 primarily due to a decline in input costs of approximately $80 million for the six months of fiscal 2017, partially offset by product mix changes. Average sales price decreased in the second quarter of fiscal 2017 mostly due to declines in foodservice, partially offset by increased input costs of approximately $20 million. Operating income decreased due to an impairment of $52 million related to our San Diego operation, in addition to higher operating costs at some of our facilities, increased marketing, advertising and promotion spending and $25 million and $3 million of compensation and benefit integration expense for the six months and second quarter of fiscal 2017, respectively. Additionally, Prepared Foods operating income was positively impacted by $139 million in synergies, of which $28 million was incremental synergies in the second quarter of fiscal 2016. 

In fiscal 2017, USDA indicates domestic protein production (beef, pork, chicken and turkey) should increase approximately 3%-4% from fiscal 2016 levels, but strong export markets should partially offset the increase. As the integration of Hillshire Brands continues, synergies of around $675 million in fiscal 2017 are expected from the acquisition.

Acquisition – On April 25, 2017, Tyson Foods entered into a definitive merger agreement to acquire all of the outstanding shares of AdvancePierre Foods Holdings, Inc. for $40.25 per share in cash, or approximately $3.2 billion, and assume $1.1 billion of AdvancePierre's gross debt. The transaction is expected to close during third quarter of fiscal 2017, subject to a tender offer process, customary regulatory approvals, and the satisfaction of other closing conditions.

Sale of Non-Protein Businesses – On April 24, 2017, Tyeson announced its intent to sell three non-protein businesses, Sara Lee Frozen Bakery, Kettle and Van’s, which are all a part of its Prepared Foods segment, as part of its strategic focus on protein-packed brands. The transactions are expected to close within the next 12 months. The projected sales of these businesses total approximately $650 million for fiscal 2017.

Beef – Fed cattle supplies are expected to increase approximately 6%-7%, partially offset by reduced weights, in fiscal 2017 as compared to fiscal 2016. For fiscal 2017, Tyson expects its Beef segment's operating margin to be around 5%.

Pork –Hog supplies are expected to increase approximately 3%-4% in fiscal 2017 as compared to fiscal 2016. For fiscal 2017, Tyson expects its Pork segment's operating margin to be around 12%.

Chicken – USDA shows an increase in chicken production of approximately 1%-2% in fiscal 2017 as compared to fiscal 2016. Based on current futures prices, Tyson expects similar feed costs in fiscal 2017 as compared to fiscal 2016. For fiscal 2017, Tyson projects its Chicken segment's operating margin should be in its normalized range of 9%-11%.