Sysco Earns 49 Cents Per Share

First-quarter earnings season will soon be coming to a close, but there are still a few key reports left. This morning, Sysco ($SYY) reported adjusted earnings-per-share of 49 cents. Although that was five cents better than Wall Street’s consensus, Sysco’s CEO said the earnings “fell short of our expectations.” It was a one-penny increase over last year.

Let’s dig into the numbers a bit. Sales rose 7.6% to 10.5 billion which is a record for the company. The March quarter was Sysco’s fiscal third. For the first three quarters of the fiscal year, Sysco has earned $1.50 per share compared with $1.38 last year.

Sysco said that food cost inflation is running at 5.5%. I think it’s interesting to note that commodity inflation tends to weigh heavily on low-income consumers. Sysco noted that inflation in meat and poultry is over 10%. The company also said that foreign currency exchange rates knocked 0.2% off their sales growth.

Last November, Sysco raised the quarterly dividend by one penny to 27 cents per share. That was the 42nd-straight annual dividend increase. I don’t know if they’ll raise their dividend again this year. I’m assuming they will to keep the streak alive, but it will most likely be another one-penny increase.

The important part is that Sysco is clearly able to cover their dividend. A dividend decrease is certainly not in the works. Going by Friday’s close, Sysco yields 3.87%.

Posted by on May 7th, 2012 at 9:10 am


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