) has delivered third-quarter 2012 earnings of 49 cents per share,
which exceeded the Zacks Consensus Estimate of 42 cents on a
better-than-expected top-line. It also exceeded the prior-year
earnings of 48 cents per share.
The third-quarter 2012 results excludes the negative impact of
business transformation costs, while the third-quarter 2011
earnings exclude negative impact of gross business transformation
expenses and impact of Multiemployer Pension Plan (MEPP) charge,
partially offset by tax benefits and gain from corporate-owned life
Revenue and Operating Income
Sysco's sales advanced 7.6% on a year-over-year basis, to $10.5
billion in the third-quarter of 2012. Acquisition added 0.7% to
sales growth while unfavorable currency translation decreased sales
by 0.2%. Sales slightly beat the Zacks Consensus Estimate of $10.47
billion on better volumes.
Gross profits expanded 2.1% in the third quarter to reach $1.9
billion. Operating income, excluding business transformation
expenses and the impact of MEPP and COLI, increased 0.9% in the
quarter to $487.4 million.
Other Financial Updates
Cash and cash equivalents were $350.5 million at the end of
March 31, 2012 as compared to $336.5 million at the end of December
31, 2011. Long-term debt was $2.4 billion at the end of third
quarter versus $2.7 billion at the end of the prior quarter.
Sysco also spent $199 million as capital expenditure in the
third-quarter of 2012 related to facility replacements and
expansions, replacements to Sysco's fleet, and technology. The
company's capital expenditure included $39 million related to the
company's business transformation project.
The company acquired the specialty food importer European
Imports, Ltd. in the end of February, which operates as an
independent business and retains its management as well as its
employees. Further, being well positioned in the specialty import
products segment, European Imports will complement Sysco's
broad-line and specialty operations.
European Imports generated annual sales of $124 million in its
last fiscal year; and other than importing cheese specifically for
the Chicago market, it imports meat, seafood and pastries from
around the world and distributes its products to the central United
States with concentration in the Midwest, Texas, Arizona, Colorado
Headquartered in Houston, Texas, Sysco's multi-year business
transformation project is on track, employing 300 full-timers. The
company is through with the design and technology development work.
Presently, it is testing systems and processes.
We currently have a Zacks #4 Rank (short-term Sell rating) on
Sysco, which translates into a short-term Hold rating. Sysco, which
United Natural Foods, Inc.
), is the global leader in selling, marketing and distributing food
products, and operates 177 distribution facilities serving
approximately 400,000 customers.
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