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Tickers in this Article: SYY
Sysco Corporation (SYY), a global leader in selling, marketing and distribution of food products, is set to unveil its fourth quarter and fiscal 2012 results on August 13, 2012, before the market opens. The Zacks Consensus Estimate for fourth quarter earnings is 54 cents per share on revenues of $11 billion. The Zacks Consensus Estimate for fiscal 2012 earnings is $1.93 per share on revenues of $42 billion.

Third Quarter 2012 Recap

Sysco delivered third-quarter 2012 earnings of 49 cents per share, which exceeded the Zacks Consensus Estimate by 17% on a better-than-expected top-line performance.  Reported earnings barely beat the prior-year earnings by 2%.

Sysco's sales increased 7.6% on a year-over-year basis to $10.5 billion in the third-quarter of 2012. Acquisitions added 0.7% to sales growth, while unfavorable currency translation adversely impacted sales by 0.2%. Sales inched past the Zacks Consensus Estimate of $10.47 billion on better volumes.

For further details please read: Sysco Beats Estimates

Agreement of Estimate Revisions   

None of the 9 estimates for Sysco's fourth quarter 2012 earnings were revised in the last 7 days. Over the last 30 days, only 1 out of the 9 estimates moved in the downward direction.

For the full year 2012, none of the 11 estimates were revised in the last 7 days. Over the last 30 days, 1 out of the 11 estimates for full-year 2012 moved in the downward direction.

The downward movements of the estimates were prompted by increased food costs, which is likely to hurt margins in the near future.

Magnitude of Estimate Revisions

The Zacks Consensus Estimate for the fourth quarter of fiscal 2012 remained static at 54 cents over the last 7 days. However, over the last 30 days, the estimate for the fourth quarter declined by a penny from 55 cents.

The Zacks Consensus Estimate for fiscal 2012 has remained static at $1.93 per share in the last 7 days.  However, the estimate has declined by a penny from $1.94 in the last 30 days.

Surprise History

Sysco Corporation surpassed the Zacks Consensus Estimate in all the last three quarters. The company results were in line with the Zacks Consensus Estimate in the fourth quarter of fiscal 2011. The earnings surprise ranges from 0.00% to 16.67%, with the average earnings surprise being 9.00% in the trailing four quarters. Our Recommendation

Currently, we have a Neutral recommendation on Sysco Corporation. The stock carries a Zacks #4 Rank (a short-term Sell rating).

We appreciate the company's strategy of growth through acquisitions and its efforts to reduce cost and improve efficiency.  However, we are concerned about rising costs due to fuel price hikes and other inputs, which in turn hurt margins.

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