Top U.S. food distributor Sysco Corp reported quarterly results that easily beat analysts' expectations, as demand for its products rose even as it increased prices, sending its shares up as much as 11 percent to a year-high.
Like other food companies, Houston-based Sysco -- which has a market value of nearly $18 billion -- has been struggling with rising ingredient costs, but its latest quarterly report will boost investors' confidence in its ability to deal with the higher costs.
Food cost inflation -- the estimated change in Sysco's product costs -- was 5.1 percent mainly due to higher costs of meat and seafood.
The company, which distributes food products such as meat and dairy to restaurants, healthcare facilities and other customers who prepare meals away from home, posted a third-quarter net income of $258.5 million, or 44 cents a share, compared with $247.6 million, or 42 cents a share, a year ago.
Excluding items, it earned 46 cents a share, beating analysts' average estimate of 41 cents a share, according to Thomson Reuters I/B/E/S.
Sales rose 9 percent to $9.76 billion. Analysts were expecting revenue of $9.48 billion.
Shares of the company were up 11 percent at $31.78 on Monday morning on the New York Stock Exchange.
(Reporting by Mihir Dalal in Bangalore; Editing by Don Sebastian)