From The Wall Street Journal Online, CEC Entertainment Inc.'s (CEC) third-quarter profit rose 28% as the parent of the Chuck E. Cheese chain shook off worries about the H1N1 influenza and the economy to top Wall Street expectations.
The company offered a similarly promising 2009 outlook, saying it expects earnings of $2.63 to $2.67 a share. That range is above the $2.60 expected by Wall Street, according to Thomson Reuters. Noting recent improvement in same-store sales trends, the company expects the figure to be down 2% in the fourth quarter.
CEC's 2010 earnings outlook, at $2.70 to $2.80, is in line with the $2.79 expected by analysts. The company also sees same-store sales flat to up 1%. Cheese prices are seen rising to between $1.50 and $1.60 from the $1.40 expected for the fourth quarter.
Meanwhile, the company's board authorized the repurchase of up to $200 million of CEC common stock. That brings the total authorization to $237.8 million, or 40% of CEC's market capitalization.
The economy and H1N1 influenza--a worry as children are especially vulnerable to the sometimes deadly virus--had put a damper on the fun for the pizza and entertainment chain's investors. CEC has been helped by lower prices for cheese, a key ingredient in the company's pizzas.
CEC reported earnings of $12.7 million, or 55 cents a share, compared with $9.9 million, or 43 cents a share, a year earlier. Revenue dropped 2% to $197.8 million as same-store sales fell 3%.
Analysts projected earnings of 46 cents on revenue of $196 million.
Food and beverage sales, which accounted for under half of revenue, fell 5.2%, while entertainment and merchandise revenue rose 1.3%.
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