After posting a robust first-quarter 2012 earnings, the world’s leading retail of food and related goods retailer Sysco Corporation (SYY) has authorized a repurchase of 20 million common shares and raised its dividend by a penny to 27 cents a share.
The new dividend is payable on January 27, 2012, to common shareholders of record at the close of business on January 6, 2012. Sysco was founded as a public company in 1970 and since then it has paid a quarterly cash dividend every quarter. Moreover, the company has increased its dividend 43 times in that period.
The company has 5.3 million shares remaining from the 20 million share buy back program that was announced in August 2010. The share repurchase program is a part of an ongoing goal to keep the number of diluted shares outstanding relatively constant. The company has an estimated 586 million shares outstanding.
In the recently concluded quarter, Sysco generated $255 million of cash from operations. Around $227 million of capital expenditure in the first quarter of 2012 related to facility replacements and expansions, replacements to Sysco's fleet, and technology.
Another $45 million of capital expenditure related to the company's business transformation project.
Cash and cash equivalents were $284 million at the end of October 1, 2011, while long-term debt was $2,384 million.
Sysco, the global leader in selling, marketing and distributing food products, operates 177 distribution facilities, serving approximately 400,000 customers. For fiscal year 2011, which ended on July 2, 2011, the company generated record sales of more than $39 billion.
Sysco’s first-quarter 2012 earnings (excluding one-time items) of 55 cents per share exceeded the Zacks Consensus Estimate and prior-year earnings by 5.76% and 7.84%, respectively. While sales advanced 8.6% on a year-over-year basis to $10.6 billion in the first-quarter, acquisition growth and favorable currency translation contributed to the sales growth by 0.7% each.
Sysco holds a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating.
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