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Sysco beats net earnings, EPS estimates; Aryzta plans to raise €800M

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Sysco beats net earnings, EPS estimates; Aryzta plans to raise €800M

TOP NEWS

* U.S. food distributor Sysco Corp. reported fiscal fourth-quarter and full-year adjusted net earnings and EPS that beat analyst expectations, while the company said inflation on certain goods continues to squeeze its gross margins. Sysco reported adjusted EPS of 94 cents in the fiscal fourth quarter, an increase of 30.6% over the previous year and above the mean consensus estimate for normalized EPS of 93 cents, according to S&P Global Market Intelligence. For fiscal 2018, adjusted EPS was 26.6% higher than 2017 at $3.14, beating the S&P Global Market Intelligence mean consensus estimate for normalized EPS of $3.02. Sysco reported $1.66 billion in adjusted net earnings for fiscal 2018, a 22.1% increase over the prior year. The figure beat the mean consensus estimate of $1.60 billion in net income excluding exceptions.

* Aryzta AG said it plans to raise €800 million of equity to help the company strengthen its financial position and achieve its turnaround plan. The company aims to raise the money primarily through issuing new shares, with pre-emptive rights for existing shareholders. The baking group said further details on the terms and conditions of the capital increase will be released with the company's full-year results Oct. 1. The group said that trading in the fourth quarter was in line with expectations and reaffirmed its full-year guidance for EBITDA of €296 million to €304 million.

FOOD RETAIL AND DISTRIBUTION

* U.K. Member of Parliament Robert Halfon expressed "serious concerns" that the proposed merger of Asda Stores Ltd. and J Sainsbury PLC will result in higher petrol and diesel prices, The Times reported. The Conservative MP teamed up with a campaign group, Fair Fuel UK, to demand assurances from the Competition and Markets Authority that fuel prices will be monitored in the event of a merger, the report added. Halfon said the fuel supply chain remains unchecked, and any reduction in competition at the pumps is bad news, the report noted.

AGRICULTURAL PRODUCTS

* Farmers in Brazil are aligning their crops with Chinese appetite amid rising U.S.-China trade tensions and a stubborn sugar-market glut, Reuters reported. Citing government data, the report added that the nation's soy plantings have expanded by 2 million hectares in two years, while land used for cane shrunk by nearly 400,000 hectares. China's 25% tariff on U.S. soybeans is likely to boost Brazil's soy exports to an all-time record this year, the report added. Soy exports from Brazil to China rose to nearly 36 million tons in the first half of 2018, up 6% from a year ago, the report noted.

* Singapore-listed commodity trader Wilmar International Ltd reported a net profit of $316.4 million for the second quarter ended June 30, compared to $59 million reported a year earlier. The company said the trade tensions between the U.S. and China improved crush margins in the short term, thus benefiting its crushing business. Wilmar added that a prolonged dispute between the two countries may ultimately lead to lower plant utilization and result in a negative impact on crush margins.

PACKAGED FOODS

* China's state grain stockpiler Sinograin will pay the extra import duties on its 70,000-tonne cargo of soybeans from the U.S., Reuters reported, citing China's state-run Beijing News. According to the report, total duties will be about $6 million.

* Associated British Foods PLC-owned tea brand Twinings made public a list of the Indian tea plantations it buys from, Reuters reported. This move comes as major brands face increased regulatory and consumer pressure to make sure their supply chain is free from slavery and abusive practices. India's tea industry employs 3.5 million workers, and studies have found that many live in "appalling" conditions below the poverty line, the report noted. Twinings' decision puts pressure on the other big tea brands, including PG Tips, Tetley, Typhoo and Clipper, to publish lists of their suppliers, the report said, citing Fiona Gooch, a senior policy advisor at Traidcraft Exchange.

TOBACCO AND SMOKING PRODUCTS

* Healthcare providers, fire authorities and schools have invested more than £1.7 billion in tobacco company stocks through U.K. council pension funds, The Guardian reported. According to data gathered through 100 freedom of information requests, The Guardian reported that council retirement schemes in the U.K. are major investors in firms including British American Tobacco PLC, Imperial Brands PLC and Philip Morris International Inc. According to the report, several councils said their pension trustees cannot dispose of off these stocks because of a legal obligation to maximize retirement income, while anti-smoking campaigners said that argument "no longer has any credibility."

RESTAURANTS

* Australian fast-food chain Domino's Pizza Enterprises Ltd. posted A$136.2 million in net profit after tax for the financial year 2018, 15% higher than the previous financial year. Based on growing sales in all markets, the company lifted its dividend to 107.8 cents per share. The company recorded sales of A$2.59 billion, up 11.7% compared to the previous financial year.

Now featured on S&P Global Market Intelligence

Trucker shortage continues to drive higher operating expenses for Sysco

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, Hang Seng dropped 0.66% to 27,752.93, while the Nikkei 225 gained 2.28% to 22,356.08.

In Europe, around midday, the FTSE 100 gained 0.02% to 7,643.69, and the Euronext 100 rose 0.43% to 1,065.51.

On the macro front

The import and export prices report and the Redbook Index for retail sales are due out today.

The National Federation of Independent Business' index of small business optimism increased to 107.9 in July from 107.2 in June.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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