Sysco Q3 Profit Rises; Results Top Estimates

(RTTNews) - Foodservice distributor Sysco Corp.(SYY) reported a third-quarter profit that grew 22.7 percent from last year, while quarterly sales increased 2.2 percent. Both earnings per share and revenue for the quarter beat analysts' expectations.

"Our favorable local case growth and expense management trends have driven improved operating income performance this year, and we are committed to sustaining this momentum in our fourth quarter and into fiscal 2017," said Bill DeLaney, Sysco's chief executive officer.

Net earnings for the third-quarter increased 22.7 percent to $217.14 million from last year's $176.96 million, with earnings per share improving to $0.38 from $0.30 in the prior year.

Adjusted net earnings were $261 million, an increase of $24 million, or 10.0%, compared to the same period last year. Adjusted earnings per share was $0.46, which was 15.0% higher compared to the same period last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.

Operating expenses increased $35 million or 2.0%, compared to the same period last year, due mainly to higher case volume-related expenses and incentive expense. Operating income was $378 million, an increase of $50 million, or 15.4%, compared to the same period last year. Interest expense was $58 million, a decrease of $12 million compared to the same period last year.

Sales for the third quarter were $12.0 billion, an increase of 2.2% compared to the same period last year. Wall Street expected revenues of $11.87 billion for the third-quarter. Overall food cost deflation was 0.4% (0.8% in U.S. broadline), as measured by the estimated change in Sysco's product costs, with deflation in the meat, seafood and poultry categories partially offset by modest inflation in other categories.

In addition, sales from acquisitions completed within the last 12 months increased sales by 0.9%, and the impact of changes in foreign exchange rates decreased sales by 1.0%.

SYY closed Friday's regular trading at $46.07, down $0.19 or 0.41 percent.