Sysco (SYY) stock was up on Monday following the company’s most recent earnings report.
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Houston-based Sysco, the nation’s largest distributor of food and other supplies to restaurants and cafeterias, in June dropped its $3.5 billion attempt to buy US Foods amid growing signs the deal wouldn’t pass regulatory muster.
However, adjusted earnings per share beat analysts’ expectations, while quarterly sales missed their estimates.
For the most recent quarter, Sysco said its adjusted earnings came in at 52 cents per share, a 6.1% increase when compared to the same quarter in 2014.
Adjusted net earnings for the quarter were $309.2 million, compared to $292.6 million a year ago.
Operating expenses during the quarter jumped 21%-mainly due to $313 million in merger-termination charges. Adjusted operating income increased 5.8% in the quarter to $509 million despite a 2.2% increase in adjusted operating expenses.
“I am pleased with our results for fiscal 2015 and particularly encouraged by our performance in the fourth quarter”, CEO Bill DeLaney said in a statement. EPS was 12 cents for the quarter, which is down from the 43 cents per share that was reported during the fourth quarter of 2014.
For the full fiscal year, Sysco posted earnings of $1.84 per share on revenue of $48.7 billion, a 5.1% and 4.7% year over year increase, respectively. On average, eleven analysts polled by Thomson Reuters expected the company to report earnings of $0.51 per share for the quarter. This was offset by modest deflation in the dairy, produce and seafood categories.
Its gross profit rose 3.0 percent to $2.2 billion, while gross margin expanded 35 basis points to 17.9 percent.
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SYSCO shares gained 1.88 percent to close at $36.93 on Friday. In addition, sales from acquisitions (completed within the last 12 months) increased sales by 0.4%, and the impact of changes in foreign exchange rates decreased sales by 1.4%. As previously announced, we plan to repurchase an incremental $3 billion in Sysco shares over the next two years, including $1.5 billion through an accelerated share repurchase in Fiscal 2016. “We will also continue to further evaluate opportunities to optimize our capital structure”. Operating income decreased 72 percent to $121.00 million.
