DineEquity’s Quarter Exceeds Expectations

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DineEquity Inc. on Tuesday reported higher-than-expected quarterly net income, but shares fell 14 percent after the restaurant chain said it had filed a statement with the Securities and Exchange Commission to sell up to $200 million of securities.

The Glendale parent of the IHOP and Applebee’s chains reported second-quarter net income was $18.8 million ($1.09 a share), compared with a loss of $23.7 million (-$1.42) a year ago.

Revenue dropped more than 17 percent to less than $350 million. Same-store sales fell 0.6 percent at IHOP restaurants and 4.3 percent at Applebee’s restaurants. The company said its bottom line was helped by controlling expenses and by lower interest costs as the company reduced securitized debt by $42 million. IHOP bought Applebee’s in a $2 billion leveraged buyout in 2007.

Excluding one-time items, earnings were 74 cents per share. Analysts surveyed by Thomson Reuters on average expected earnings of 36 cents on revenue of more than $354 million.

“Our team is doing an outstanding job during one of the most challenging economic and competitive periods we have ever seen,” Chief Executive Julia Stewart said in a statement.

DineEquity shares were down $4.39, or 14 percent, to $26.70 in midday trading on the New York Stock Exchange.

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