A global leader in selling, marketing and distributor of food
) posted first quarter of 2013 adjusted earnings (excluding
special items) of 58 cents, beating the Zacks Consensus Estimate
of 50 cents by 16%. The adjusted earnings also exceeded the
prior-year quarter earnings of 56 cents by 3.6%. The upswing in
the results was driven by solid top-line growth, prudent expense
management and moderating cost environment.
Quarter in Detail
Sysco's sales grew 4.7% on a year-over-year basis to $11.08
billion in the first quarter of 2013, driven by 2.9% volume
growth (including acquisitions). Acquisitions contributed 0.5% to
sales growth, while unfavorable currency translation decreased
sales by 0.3%. First quarter sales slightly lagged the Zacks
Consensus Estimate of $11.15 billion.
Gross profit increased 2.9% to $2.0 billion, driven by strong
sales. Adjusted operating income increased 2.0% in the quarter to
$562.9 million, despite higher operating expenses.
Other Financial Updates
Cash and cash equivalents were $548.4 million at the end of
September 29, 2012 as compared to $688.9 million at the end of
June 30, 2012. Long-term debt was flat at $2.8 billion in the
quarter as compared with the prior quarter.
Sysco spent $156 million as capital expenditure in the first
quarter of 2013 related to facility replacements and expansions,
replacements to Sysco's fleet, and technology. The company spent
$152 million in the prior quarter.
Currently, we have a Neutral recommendation on Sysco
Corporation. The stock carries a Zacks #4 Rank (a short-term Sell
We appreciate the company's strategy of growth through
acquisitions and its efforts to reduce cost and improve
efficiency. However, we are concerned about rising costs
due to fuel price hikes and other inputs which hurt margins.
SYSCO CORP (SYY): Free Stock Analysis Report
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