Sysco Earns 44 Cents Per Share

Good news this morning. Sysco ($SYY) just reported fiscal Q3 earnings of 44 cents per share which was three cents more than Wall Street was expecting. The shares look to open about 5% higher.

This was a surprise to traders but not to me. I said on Friday’s CWS Market Review that I was expecting earnings from Sysco of 43 cents per share.

Here are some more details:

Sales were $9.8 billion, an increase of 9.1% from $8.9 billion in the third quarter of fiscal 2010.

Operating income was $427 million, including a $36 million charge related to the withdrawal of an operating company from a multi-employer pension plan (MEPP). This result was $5 million, or 1.1%, lower than last year’s third quarter.

Diluted earnings per share (EPS) were $0.44, including a $0.04 negative impact related to the MEPP withdrawal discussed above, and a $0.02 tax benefit related to the recognition of deferred tax assets. This result was 4.8% higher compared to $0.42 in last year’s third quarter.

This is welcome news for Sysco especially since they had a poor earnings report three months ago. In February, SYY reported fiscal Q2 earnings of 44 cents per share which was three cents below estimates. At the time, I said I was disappointed by the quarter but ultimately, I felt that the problems were manageable. That appears to be correct.

Sysco has earned $1.42 so far is the first three quarters of their fiscal year. They’re on track to earn about $1.97 for the year. We haven’t heard any guidance from the company, but I think they can earn $2 per share next year.

I said that Sysco could be a $30 stock, and it may be one before the day is out.

Posted by on May 9th, 2011 at 8:51 am


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