Sysco's Fiscal 2Q Profit Rises 13% On Prior-Year Charges

Date : 02/01/2010 @ 9:01AM
Source : Dow Jones News
Stock : Sysco Corp. (SYY)
Quote : 51.719  0.169 (0.33%) @ 10:31AM

Sysco's Fiscal 2Q Profit Rises 13% On Prior-Year Charges

Sysco (NYSE:SYY)
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Sysco Corp.'s (SYY) fiscal second-quarter earnings rose 13% on prior-year charges as revenue declined, though food costs also dropped.

"While the business environment remains challenging, deflation pressures appear to be moderating from highs we saw early in the quarter and case volume trends continue to improve," said Chief Executive Bill DeLaney.

North America's largest marketer and distributor of foodservice products found a bright spot in the mostly resilient fast-food sector as consumers trade down to less-expensive eateries and dine out less overall. The company, which derives about 65% of its sales from restaurants, has been building up its sales force after several years of trimming and plans to continue buying up struggling rivals.

For the quarter ended Dec. 26, Sysco reported a profit of $268.3 million, or 45 cents a share, up from $237.7 million, or 40 cents a share, a year earlier. The latest period included a penny of benefit from corporate-owned life insurance, while the prior year included 5 cents a share in losses from the life insurance program.

Revenue decreased 3.1% to $8.87 billion, helped in part by a small boost from acquisitions.

Analysts polled by Thomson Reuters forecast earnings of 42 cents a share on revenue of $8.83 billion.

Gross margin was flat at 19.1%.

The company said capital expenditures have totaled $248 million so far this fiscal year. Sysco expects $600 million to $650 million for the year.

Shares closed Friday at $27.99 and were inactive premarket.

-By Tess Stynes and Nathan Becker, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;

 
 

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