A unit of Tyson Foods has reportedly won two contracts worth more than US$700m to supply fresh beef and frozen ground beef to the US Pentagon.
Tyson Fresh Meats secured a $440m deal for military commissaries in the central and eastern US regions, the Pentagon said yesterday (16 August), according to Reuters.
The other contract is worth $286.6m for the same line of products to supply commissaries in the U.S. western and Pacific regions.
Both deals are set to run for two years from 2018 to 2020, with a possible option to extend the contracts through to 17 October 2023, the news agency reported.
The deals would be welcome news for the US-based meat giant, which in July cut its full-year earnings guidance due to the “uncertainty” behind the country’s trade policies and volatility in commodity markets among the factors. It also cited “sluggish” domestic chicken demand due to pricing competition in proteins, suppressed prices of pork products, and a less-than-expected benefit from US tax reforms.
The New York-listed firm expects its adjusted earnings per share for 2018 to come in at $5.70-$6.00, compared to an earlier prediction of $6.55-6.70.