DineEquity Inc. reported third-quarter profit that beat Wall Street forecasts, helped by gains on the sale of restaurants to franchisees.
The Glendale parent of the Applebee’s and IHOP chains on Tuesdayreported net income of $58.7 million ($3.14 a share), compared with $15.5 million (85 cents) in the same period a year earlier.
Revenue fell 18 percent to $216 million. Third-quarter sales at U.S. restaurants open at least 18 months were up 2 percent at Applebee's, but down 2 percent at IHOP.
Excluding one-time items, DineEquity earned $1.03 a share. Analysts surveyed by Thomson Reuters on average expected the company to report adjusted profit of 93 cents a share on revenue of less than $203 million.
The quarter included a $73.7 million gain from asset sales, partially offset by higher income taxes and expenses. Earlier this month, the company completed its transition to a fully franchised restaurant system.
“Our more efficient business model continued to generate strong free cash flow, enabling further debt reduction as we optimize our (general and administrative) structure to create additional value for our stockholders,” Chief Executive Julia Stewart said in a statement.
The markets were closed Tuesday in the wake of Hurricane Sandy. On Wednesday, shares closed up $5.07, or 9 percent, to $62.70 on the New York Stock Exchange.