Sysco’s Q1 Profit Jumps 18%, but Sales Fall Again (SYY)

Created by Dividend.com

Food distributor SYSCO Corporation (SYY) on Monday posted higher-than-expected first quarter earnings, helped by cost cuts, although revenue fell for the fourth consecutive quarter.

The Houston-based company reported third quarter net income of $326.2 million, or 55 cents per share, up from $276.8 million, or 46 cents per share, in the year-ago period. Excluding one-time items, adjusted profit was 46 cents per share.

Sales fell 8% from last year, to $9.08 billion.

On average, Wall Street analysts expected a smaller profit of 45 cents per share, albeit on higher revenue of $9.16 billion.

Sysco shares were mostly flat in morning trading Monday.

The Bottom Line
We had removed shares of SYY from our “recommended” list back last Oct.6, when the stock traded at $29.72. The company has a 3.63% dividend yield, based on Friday’s closing stock price of $26.45. The stock has long-term technical support in the $22-$24 price area on the downside. If the shares can firm up, we see overhead resistance around the $27-$30 price levels. We would remain on the sidelines for now.

SYSCO Corporation (SYY) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

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