Sysco reports 2012 fiscal second quarter results

Sysco reports 2012 fiscal second quarter results

Sysco Corporation (NYSE:SYY) has announced financial results for its 13-week fiscal second quarter ending December 31, 2011.

For the second quarter of fiscal 2012, sales for the Houston TX-based foodservice provider were $10.2 billion, an increase of 9.2% from $9.4 billion in the second quarter of fiscal 2011. Operating income was $427 million, a decrease of 2.3% compared with $437 million in the prior year’s second quarter. Adjusted operating income climbed 2.5%, excluding gross business transformation expenses and the positive impact of corporate-owned life insurance (COLI).

Diluted earnings per share (EPS) were $0.43, which included a $0.03 negative impact from gross business transformation expenses. This was a decrease of 2.3% versus the prior year’s second quarter EPS of $0.44, which also included a $0.03 negative impact from gross business transformation expenses, partially offset by a $0.02 benefit from COLI.

Adjusted diluted EPS was $0.46, a gain of 2.2% compared with the prior-year period, excluding gross business transformation expenses and the positive impact of COLI.

In the first half of fiscal 2012, sales were $20.8 billion, an advance of 8.9% from $19.1 billion in the first half of fiscal 2011. Operating income was $936 million, a decline of 0.7% compared with $943 million in fiscal 2011’s first half. Adjusted operating income rose 4.4%, excluding gross business transformation expenses and the positive impact of COLI a year earlier.

Diluted EPS was $0.94, which included an $0.08 negative impact from gross business transformation expenses. This was a decrease of 1.1% versus the prior year’s first half EPS of $0.95, which included a $0.04 negative impact from gross business transformation expenses and a $0.04 benefit from COLI.

Adjusted diluted EPS was $1.02, an increase of 7.4% compared with the prior-year period, excluding gross business transformation expenses and the impact of COLI.

“Our case growth trends improved in the latter part of the quarter as we were well-positioned to benefit from the favorable market conditions our customers experienced during the holiday season,” said Bill DeLaney, Sysco’s president and chief executive officer. “Adjusted operating earnings growth in our core business was modest however, as product cost inflation continued at historically high levels and pricing pressure remained acute.”

Cash flow from operations was $539 million for the first half of fiscal 2012, in contrast to $283 million in the prior year. Capital expenditures totaled $207 million for the second quarter, including $33 million related to the company’s business transformation project, and $434 million in the first half of the fiscal year that included $79 million for the business transformation project. Primary areas for investment included facility replacements and expansions, replacements to Sysco’s fleet, and technology.

Visit www.sysco.com for more information.

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