Thursday, February 3, 2011

Sysco Corp. (NYSE: SYY): Q2 Earnings Preview

Sysco Corp. (NYSE: SYY) is scheduled to release fiscal second-quarter earnings before the market open on Monday, February 7, 2011. Analysts, on average, expect the company to report earnings of 47 cents per share on revenue of $9.47 billion. In the year ago quarter, the company reported earnings of 45 cents per share on revenue of $8.87 billion.

Sysco Corporation, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice industry in the United States.

In the preceding first quarter, the Houston, Texas-based company's net income was $299.07 million, or 51 cents per share, compared to $326.205 million, or 55 cents per share, in the prior-year quarter. Revenue rose 7.4% to $9.75 billion from $9.08 billion. Analysts, on average, expected the company to report earnings of 51 cents per share on revenue of $9.56 billion.

As the economy strengthens, more people are venturing out to restaurants, and Sysco’s order book is beginning to fatten. The wholesale food industry finished 2010 on a positive note and is looking to continue its run into 2011. The industry was primarily boosted by stronger restaurant figures and a continuing consumer preference for organic and natural foods. However, rising food prices and elevated unemployment levels still remain concerns. 

Sysco has been spending money pretty briskly on capital projects that include new distribution centers and a centralized software system that should begin to yield efficiencies as it comes online this year. Meanwhile, tghe company's ongoing productivity initiatives helped to mitigate a portion of the gross margin pressure within U.S.

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