Finances

Tyson Foods, Inc. (TSN) released its first quarter earnings report on Monday, February 3. While the company topped analyst estimates, the food company’s stock traded down by over 1% following the release of the report.

Tyson posted revenue of $13.62 billion for the quarter, up 2.3% from $13.32 billion reported in the same quarter last year. First quarter revenue was above the $13.46 billion that analysts expected.

"Fiscal year 2025 is off to a strong start, as we delivered our third consecutive quarter of year-over-year growth in sales, operating income, and EPS," said Tyson Foods CEO, Donnie King. "Our best quarterly performance in more than two years reflects improved execution across the business, including exceptional results in chicken. Consumers remain focused on adding protein to their diets, and our diversified multi-channel, multi-protein portfolio ensures we are well-positioned to meet this demand while reinforcing our leadership as a world-class food company."

For the first quarter, the company posted net income of $359 million or $1.03 per adjusted share. This is an increase from net income of $107 million or $0.31 per adjusted share this time last year.

The Arkansas-based food company includes brands such as Jimmy Dean, Hillshire Farm and Ball Park. The company experienced a sales volume increase in some segments: 5.6% in Beef, 1.5% in Chicken and 4.3% in International sales. The company, however, had a decline of 0.4% and 3.2% in sales of Pork and Prepared Foods respectively. Operating income increased 3.6% in Pork, 8.6% in Chicken and 8.5% in Prepared Food while decreasing 1.2% in Beef. Tyson raised its fiscal 2025 guidance and expects adjusted operating income to be between $1.9 to $2.3 billion and revenue to be flat to up 1% compared to fiscal 2024.

Tyson Foods, Inc. (TSN) shares ended the week at $57.94, relatively unchanged for the week.

PepsiCo Serves Up Earnings

PepsiCo, Inc. (PEP) released its fourth quarter and full year earnings report on Tuesday, February 4. The beverage and snack manufacturer’s shares decreased more than 2% following the earnings report.

The company reported quarterly revenue of $27.78 billion, slightly down from $27.85 billion in revenue during the same quarter last year, and below analysts’ estimates of $27.89 billion. For the full year, revenue came in at $91.85 billion, up from $91.47 billion reported one year ago.

“Our businesses remained resilient in 2024, despite subdued category performance trends in North America, the continued impacts related to a recall in our Quaker Foods North America division and business disruptions due to geopolitical tensions in certain international markets,” said PepsiCo CEO, Ramon Laguarta. “Our enhanced multiyear productivity initiatives enabled us to invest in our businesses, and deliver improvements in our gross margin, operating margin expansion and EPS in 2024.”

PepsiCo reported net income of $1.52 billion for the quarter or $1.11 per adjusted share. This was up from $1.30 billion or $0.94 per adjusted share in the same period a year ago. For the full year, the company’s net income was $9.58 billion.

The company’s PepsiCo Beverages North America segment reported $7.91 billion in revenue, relatively unchanged from the year prior. The Frito-Lay North America segment reported $7.32 billion in revenue, down from $7.47 billion at the same time last year. The Quaker Foods North America segment generated revenue of $874 million for the quarter, a decrease from $893 million in revenue one year ago. For fiscal 2025, the company expects total cash return to shareholders of about $8.6 billion, made up of $7.6 billion in dividends and $1.0 billion in share repurchases.

PepsiCo, Inc. (PEP) shares ended the week at $144.58, down 3% for the week.

Alphabet Releases Quarterly and Full-Year Results

Alphabet Inc. (GOOGL) released its fourth quarter and full year earnings report on Tuesday, February 4. The tech titan reported lower-than-expected revenue, causing shares to drop more than 9% following the earnings release.

The company reported revenue of $96.47 billion, up 12% from $86.31 billion during the same quarter last year. Revenue fell short of analysts’ expected quarterly revenue of $96.56 billion. For the full year, revenue came in at $350.02 billion, an increase from $307.39 billion the year prior.

“Q4 was a strong quarter driven by our leadership in AI and momentum across the business,” said Alphabet CEO, Sundar Pichai. “We are building, testing, and launching products and models faster than ever, and making significant progress in compute and driving efficiencies. Our results show the power of our differentiated full-stack approach to AI innovation and the continued strength of our core businesses. We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025.”

Alphabet posted net income of $26.54 billion or $2.15 per adjusted share for the fourth quarter. This was up from $20.69 billion or $1.64 per adjusted share during the same time last year. For the full year, the company’s net income was $100.12 billion.

Alphabet, the parent company of Google, reported Google advertising revenue of $72.46 billion for the quarter, up from $65.52 billion during the same quarter last year. Within Google advertising revenue, YouTube advertising revenue increased to $10.47 billion compared to $9.20 billion at the same time last year. Google Cloud revenue came in at $11.96 billion, up from $9.19 billion one year ago. Operating income for the quarter was $30.97 billion, up from $23.70 billion in the year prior.

Alphabet Inc. (GOOGL) shares ended the week at $185.34, down 8% for the week.

The Dow started the week at 44,268 and closed at 44,303 on 2/7. The S&P 500 started the week at 5,970 and closed at 6,026. The NASDAQ started the week at 19,215 and closed at 19,523.

U.S. Treasury yields varied throughout the week as markets reacted to the latest economic data on the services sector and anticipated the latest nonfarm payrolls released on Friday. Yields rose at the end of the week as the latest jobs data showed the unemployment rate fell in January.

On Wednesday, the Institute for Supply Management (ISM) released its Services purchasing managers’ index (PMI) for January indicating growth in the service industry. The PMI measures the change in economic activity in the services sector and is used as an indicator of U.S. economic activity. The PMI for January was 52.8%, down from a PMI of 54.0% in December and below economists’ estimates of 54.3%.

“January was the second month in a row with all four subindexes that directly factor into the services PMI — business activity, new orders, employment and supplier deliveries — in expansion territory,” said chair of the ISM services business survey committee, Steve Miller. “Poor weather conditions were highlighted by many respondents as impacting business levels and production. Like last month, many panelists also mentioned preparations or concerns related to potential U.S. government tariff actions; however, there was little mention of current business impacts as a result.”

The benchmark 10-year Treasury note yield opened the week of February 3 at 4.54% and traded as low as 4.40% on Wednesday. The 30-year Treasury bond opened the week at 4.79% and traded as low as 4.62% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 11,000 to 219,000 for the week ending February 1. Continuing unemployment claims rose by 36,000 to 1.89 million. On Friday, the Bureau of Labor Statistics released its monthly jobs report for January which indicated the unemployment rate fell to 4% in January, from 4.1% in December. The report also noted an increase of 143,000 jobs in January, below economists’ forecasts of 169,000.

“Today’s jobs report has likely taken a March rate cut off the table,” said chief global strategist at Principal Asset Management, Seema Shah. “Aside from a slightly disappointing headline payrolls number, the broader picture is still one of labor market resilience and sustained wage pressures.”

The 10-year Treasury note yield finished the week of 2/3 at 4.50% while the 30-year Treasury note yield finished the week at 4.69%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, February 6. The survey revealed a third consecutive week of declining mortgage rates.

This week, the 30-year fixed rate mortgage averaged 6.89%, down from last week’s average of 6.95%. Last year at this time, the 30-year fixed rate mortgage averaged 6.64%.

The 15-year fixed rate mortgage averaged 6.05% this week, down from last week’s average of 6.12%. During the same week last year, the 15-year fixed rate mortgage averaged 5.90%.

"The 30-year fixed-rate mortgage decreased this week, now averaging 6.89%,” said Freddie Mac’s Chief Economist, Sam Khater. "Mortgage rates have been stable over the last month and incoming data suggest the economy remains on firm footing. Even though rates are higher compared to last year, the last two weeks of purchase applications are modestly above what we saw a year ago, indicating some latent demand in the market.”

Based on published national averages, the savings rate was 0.41% as of 1/21. The one-year CD averaged 1.82%.

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