Sysco Earnings Rise as Margins Improve
Sysco reported better-than-expected second-quarter fiscal 2016 results before markets opened Monday morning.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Sysco Corp. (NYSE: SYY) reported second-quarter fiscal 2016 results before markets opened Monday. The food distributor posted adjusted diluted earnings per share (EPS) of $0.48 on revenues of $12.2 billion. In the same period a year ago, the company reported EPS of $0.41 on revenues of $12.09 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.41 and $12.14 billion in revenues.
Adjusted EPS includes a one-time $0.03 benefit from resolving certain tax contingencies. Quarterly EPS is up 17.1% year over year. For the first half of the fiscal year, adjusted EPS totaled $1.00, up 7.5% compared with the first half of 2015.
CEO Bill DeLaney said:
We achieved strong local case growth, while managing gross margins well and also containing operating expense growth. Through the first six-months of the year, we are on-track to achieve our financial objectives for the first year of our three-year plan.
[nativounit]
The company’s three-year plan aims to reduce costs, target smaller acquisitions and expand sales. Operating income is targeted to rise by $400 million and deliver a 15% return on invested capital by 2018.
Adjusted operating income for the quarter rose 10.2% to $437 million and operating margin totaled 3.59%, up 31 basis points year over year. Adjusted net earnings were up 12.6% to $275 million.
Sysco did not offer guidance in its press release. Consensus estimates call for third-quarter EPS of $0.40 and revenues of $11.95 billion. For the full year, analysts are looking for EPS of $1.93 and revenues of $50.46.
The stock closed at $39.81 on Friday, up about 0.8%, in a 52-week range of $35.45 to $42.03. Shares were inactive in Monday’s premarket trading. The consensus price target on the stock is $39.36.
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
