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Tyson Foods raises annual sales forecast on higher U.S. meat prices

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© Reuters. FILE PHOTO: Tyson Chicken Nuggets, owned by Tyson Foods, are seen for sale in Queens, New York, U.S., November 16, 2021. REUTERS/Andrew Kelly

By Tom Polansek and Deborah Mary Sophia

(Reuters) -Tyson Foods Inc raised its full-year sales outlook on Monday as soaring meat prices drove its quarterly revenue and earnings above expectations.

Meatpackers have come under scrutiny from the White House and Congress over high prices, with the Biden administration blaming a lack of competition in the sector for increases.

Tyson said it hiked prices to offset rising costs for labor and goods like animal feed.

Globally, food prices hit a record high in March.

Consumer demand for meat remains strong despite lofty prices, though some shoppers are downgrading to cheaper cuts of beef, Chief Executive Donnie King said.

“The supply chain and the consumer is more inelastic than what we had modeled in,” he told reporters.

Shares rose slightly while the broader market weakened.

Tyson projected annual sales between $52 billion and $54 billion, compared with its prior estimate for the upper end of a $49 billion to $51 billion range. Analysts on average expect $51.79 billion, according to Refinitiv IBES data.

Quarterly sales rose to $13.12 billion from $11.30 billion a year earlier, beating expectations of $12.85 billion. Adjusted earnings per share were $2.29, above estimates for $1.91.

The Arkansas-based company raised its forecast for profit margins in its beef business to 11% to 13%.

Average prices for Tyson’s beef climbed by 23.8% in the quarter that ended on April 2, compared to a year earlier, the company said. Chicken prices jumped 14.4% and pork prices rose 10.8%.

“Looking ahead, we have concerns about consumers shifting away from meat and/or downtrading,” said Michael Lavery, senior research analyst for Piper Sandler, in a note.

Inflation is also a challenge for Tyson. Its costs are up 23% for cattle and 20% for grain, King said. Higher grain prices increased the quarterly feed bill in Tyson’s chicken business by $100 million from a year earlier, according to the company.

“We are asking the customer and ultimately the consumer to pay for the inflation that we’re seeing throughout the supply chain,” King said.

Stock Markets

Plotkin’s Melvin Capital to Wind Down – Report

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© Reuters Plotkin’s Melvin Capital to Wind Down – Report

Gabe Plotkin’s Melvin Capital Management, a hedge fund that lost billions after its bearish wagers were caught up in a Reddit-fueled rally of buying stocks including GameStop (NYSE:GME), announced its plans to wind down funds and return cash to investors, Bloomberg News reported.

Plotkin wrote to investors about his decision to step away from managing external capital, noting they have not been able to deliver the returns investors should expect.

“The past 17 months has been an incredibly trying time for the firm and you, our investors,” Plotkin wrote to investors. “I have given everything I could, but more recently that has not been enough to deliver the returns you should expect. I now recognize that I need to step away from managing external capital.”

By Davit Kirakosyan

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Chevron, Schlumberger withdraw request for California carbon-capture permit

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© Reuters. FILE PHOTO: The logo of Chevron Corp is seen in its booth at Gastech, the world’s biggest expo for the gas industry, in Chiba, Japan April 4, 2017. REUTERS/Toru Hanai

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By Liz Hampton and Sabrina Valle

(Reuters) – Top U.S. energy companies Chevron (NYSE:CVX) and Schlumberger (NYSE:SLB) have withdrawn an application to capture carbon dioxide emissions and store them deep underground in central California, spokespeople said on Wednesday, putting the clean-energy project on hold after U.S. environmental regulators questioned it.

Burying industrial gases has become a focus for energy companies seeking to show investors they are willing to reduce emissions and help fight climate change. Their permit was one of more than a dozen filed with the U.S. Environmental Protection Agency (EPA), which requested the application be withdrawn.

In a March 25 letter, the EPA said the application was “substantially incomplete,” citing changes to the application and the failure to supply financial assurances.

The companies had formed a venture to revive an idled biomass-fueled power plant and generate “carbon negative power” in Mendota, near Fresno, California. The project included an underground carbon sequestration site and would remove about 300,000 tons of carbon dioxide a year.

“The EPA did the right thing by hitting the brakes on the Mendota carbon capture project,” said Victoria Bogdan Tejeda, an attorney for the Center for Biological Diversity. “Carbon capture is risky, expensive, and incompatible with environmental justice.”

Chevron and Schlumberger said they elected to withdraw the permit application and the group would continue “to gather and evaluate project information.”

“The team remains committed to developing lower carbon solutions and doing so in an environmentally and socially responsible manner,” spokespeople said.

Separately, Chevron on Wednesday said it was launching a carbon-capture and storage project in the San Joaquin Valley aimed at reducing emissions from its own operations in California.

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Synopsys Shares Up 4% Following Q2 Beat, Upbeat Guidance

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© Reuters. Synopsys Shares Up 4% Following Q2 Beat, Upbeat Guidance

Synopsys (NASDAQ:SNPS) shares were trading more than 4% higher after-hours following Q2 results, with EPS of $2.50 coming in better than the consensus estimate of $2.37. Revenue was $1.28 billion, compared to the consensus estimate of $1.26 billion.

The company expects Q3 non-GAAP EPS in the range of $2.01- $2.06 and revenue in the range of $1.21 billion – 1.24 billion. This is better than the consensus of $1.61 and $1.14 billion, respectively.

For the full 2022-year, the company expects EPS in the range of $8.63 – $8.70 and revenue in the range of $5 billion – $5.05 billion. This compares favorably to the consensus of $7.90 and $4.81 billion, respectively.

Shares of Synopsys were down 26% year-to-date going into the results.

By Davit Kirakosyan

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