UPDATE 1-Sysco sees flat to lower Q2 sales

Dec 22 (Reuters) - Food maker Sysco Corp (SYY.N) said it expects sales in the second quarter to be flat or to decline, compared with a year earlier.

Analysts were expecting the company's second-quarter revenue to rise about 4 pct to $9.63 billion.

Shares of the company were down $1 at $23.07 in trading before the bell. They closed at $24.07 Friday on the New York Stock Exchange.

"Market conditions have become progressively more difficult in recent weeks," Sysco Chief Executive Richard Schnieders said in a statement.

The Houston-based company also said it saw a $45 million fall in the cash surrender value of its corporate-owned life insurance investments during the second quarter through November.

These investments are used to fund some of the company's retirement plans and will continue to fluctuate as they are linked to market performance, Sysco added.

The company also expects a higher tax rate in the second quarter of the 2009 financial year related to the fall in the insurance investments. (Reporting by Mihir Dalal in Bangalore; Editing by Pratish Narayanan )