Sysco Serves Cold Third-Quarter Earnings
Sysco Corporation (NYSE: SYY) opens the week down after serving cold third-quarter earnings and revenue.
The Houston-based firm's EPS declined 23 percent to $0.34, falling far short of the $0.43 analysts expected.
Revenue increased 3.8 percent year-over-year to $10.9 billion, but missed the Wall Street consensus of $11.1 billion.
Commenting on the weak third quarter, President and CEO Bill DeLaney noted, “Our financial results reflect in part the difficult market conditions we experienced in our underlying business during the third quarter. Sales and operating earnings were negatively impacted by economic and weather related headwinds which dampened consumers' willingness to spend on meals away from home.”
All You Can Eat
On January 10, Sysco announced it acquired four companies in December, including:
- Orlando, Florida-based seafood supplier Central Seafood Company
- St. Cloud, Minnesota-based full-service broadline distributor Appert's Foodservice
- Buchy Food Service, a full-service broadline distributor based in Greenville, Ohio
- Distagro, the foodservice division for Montreal, Quebec-based grocery retailer, Metro Richelieu, Inc.
The companies have combined annual revenues of approximately $520 million. Specific financial terms of the deals were not disclosed.
A Beneficial Move
Effective April 15, Tom Bené took the reins in Sysco's newly-created position of EVP and chief merchandising officer. Bené was previously president of PepsiCo (NYSE: PEP) Foodservice and will oversee merchandising, supply chain and quality assurance activities in his new role.
The move came just months after the Houston Business Journal reported the company appointed two new top executives. According to the story, Mike Davis, who previously served as president of Sysco West Texas, was promoted to president of Sysco Houston. Meanwhile, former Sysco Houston President David DeVane was promoted to market president of the southwest region, as noted the Houston Business Journal.
Sysco has been on a rocky ride on the ratings front thus far in 2013.
On January 25, TheStreet reiterated its Buy rating of the company.
However, on April 9, TMC News reported that Cleveland Research downgraded the food wholesaler from Neutral to Underperform.
Then, as Benzinga reported on May 3, Cantor Fitzgerald analyst Ajay Jain downgraded North America's largest foodservice supplier from Hold to Sell. Jain noted, “Since we are not prepared to materially raise estimates at this time, we don't have reasonable basis to maintain a HOLD rating at current levels.”
After closing at a one-month high of just over $35 on May 2, Sysco fell one percent on May 3. Now, on its weak third quarter, the stock has continued its slide.
Sysco is down around 0.5 percent on Monday.
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