Sysco 4Q Profit Edges Up on Lower Costs

Monday, August 15th 2005, 9:30 am
By: News On 6

HOUSTON (AP) _ Sysco Corp., the largest foodservice distributor in North America, said Monday its fourth-quarter profit edged up 1.5 percent, as lower costs offset a decline in revenue.

Sysco, which distributes food and other services to restaurants, schools, hospitals and other institutions, reported earnings of $284.7 million, or 44 cents per share, compared with $280.6 million, or 43 cents per share, in the prior-year period. Sales declined 2 percent to $7.98 billion from $8.14 billion.

The results matched Wall Street's consensus view of 44 cents per share, the average estimate of 10 analysts surveyed by Thomson Financial, on estimated revenue of $8.04 billion.

Shares of Sysco rose 82 cents, or 2.4 percent, to $34.87 in morning trading on the New York Stock Exchange.

Costs and expenses during the quarter declined 2 percent to $7.53 billion.

Operating expenses as a portion of sales totaled 13.6 percent, down from 13.7 percent in the prior-year period. Declining inflation has lowered overall gross margin pressures in recent quarters, while spurring underlying unit growth, Sysco said.

The company also said it would start expensing stock options in the current fiscal quarter. The cost of expensing options is expected to range from 11 cents to 13 cents per share for fiscal 2006, Sysco said.