WALL STREET

Moo­dy’s ana­lyst Char­lie O’Shea said that the la­test re­sults show that Sysco “conti­nues to de­mons­trate that there are no ‘hangover’ ef­fects from the ter­mi­na­tion of its ac­qui­si­tion of US Foods”

La Presse Business (Tunisia) - - SOMMAIRE - By Mam­ta BADKAR and Adam SAM­SON

INVESTORS FIND APPETITE FOR SYSCO AFTER SHRUGGING OFF NO-DEAL ‘HANGOVER’

Sysco shares ral­lied yes­ter­day after the lar­gest food ma­nu­fac­tu­rer and dis­tri­bu­tor in the US re­por­ted bet­ter than ex­pec­ted pro­fits in its fis­cal fourth quar­ter. The Hous­ton-ba­sed com­pa­ny said pro­fits near­ly tri­pled to $215.7m, or 38 cents a share, com­pa­red with $73m, or 12 cents a share, in the year ago quar­ter. Ad­jus­ting for one-time items, ear­nings of 64 cents a share top­ped ana­lysts’ es­ti­mates. Sysco, which aban­do­ned its $8.2bn ta­keo­ver of ri­val US Foods last year but clo­sed a $3.1bn ac­qui­si­tion of UK dis­tri­bu­tor Brakes last month, said sales rose 10 per cent to $13.6bn but were just shy of ana­lysts’ ex­pec­ta­tions. Moo­dy’s ana­lyst Char­lie O’Shea said that the la­test re­sults show that Sysco “conti­nues to de­mons­trate that there are no ‘hangover’ ef­fects from the ter­mi­na­tion of its ac­qui­si­tion of US Foods”. He ad­ded: “Share re­pur­chases are pro­cee­ding with the le­vels and ca­dence we ex­pec­ted, and now that the Brakes ac­qui­si­tion has clo­sed, Sysco will fo­cus at least some of its sights on the chal­len­ging Eu­ro­pean mar­ket.” A se­pa­rate fi­ling from Trian Fund Ma­na­ge­ment late on Fri­day sho­wed that the ac­ti­vist in­ves­tor co-foun­ded by Nel­son Peltz - al­so the com­pa­ny’s lar­gest sha­re­hol­der - had boos­ted its stake in Sysco to 43.97m shares at the end of the se­cond quar­ter, up from 43.27m at the end of the first. Shares in Sysco, which have ad­van­ced 29 per cent so far this year, clim­bed as much as 3.4 per cent to $53.97. El­sew­here, Best Buy shares slip­ped after Jef­fe­ries cut its ra­ting on the stock to “hold” from “buy”. The elec­tro­nics re­tai­ler may struggle as the mar­ket for 4K te­le­vi­sions, which of­fer ul­tra-high de­fi­ni­tion vi­deo, reaches its ma­tu­ra­tion point, said ana­lyst Da­niel Bin­der. “[The] 4K TV pro­duct is get­ting com­mo­di­ti­sed more this year as prices drop and we see a si­gni­fi­cant step-up in the 4K TV as­sort­ments at mass mer­chants such as Wal­mart and Tar­get,” Mr Bin­der said. Best Buy shares fell as much as 2.2 per cent to $34.10 yes­ter­day, but still up by more than 7 per cent over 12 months. At mid­day, the broa­der US equi­ty mar­kets were in the green, with the S&P 500, Dow and Nas­daq all buil­ding on last week’s re­cord peaks. The S&P 500 rose by 0.4 per cent to 2,192.6, the Dow Jones In­dus­trial Ave­rage clim­bed 0.5 per cent to 18,665.2 and the Nas­daq Com­po­site ad­van­ced by 0.6 per cent to 5,263.8. Tra­ding may be “re­la­ti­ve­ly quiet” this week with “ma­jor eco­no­mic re­leases for the month and the ear­nings sea­son lar­ge­ly be­hind us,” said Da­vid Kel­ly, at JPMor­gan Funds. Mr Kel­ly ad­ded that ma­ny investors are loo­king ahead to com­ments la­ter this month from Fed chief Ja­net Yel­len at the an­nual eco­no­mic sym­po­sium at Jack­son Hole.

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