Denny’s Corp Third Quarter Earnings Sneak Peek

Denny’s Corporation (NASDAQ:DENN) will unveil its latest earnings on Tuesday, October 30, 2012. Denny’s operates a family-style restaurant chains in America. The company, through its wholly-owned subsidiaries, Denny’s Holdings and Denny’s, owns and operates the Denny’s restaurant brand.

Denny’s Corporation Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 9 cents per share, a decline of 10% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate moved down. It has risen from 8 cents during the last month. For the year, analysts are projecting profit of 29 cents per share, a decline of 12.1% from last year.

Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked net income of 10 cents per share versus a mean estimate of profit of 6 cents per share.

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A Look Back: In the second quarter, profit fell 43.4% to $4.6 million (5 cents a share) from $8.1 million (8 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 8.2% to $124.7 million from $135.9 million.

Wall St. Revenue Expectations: On average, analysts predict $120.6 million in revenue this quarter, a decline of 11.8% from the year-ago quarter. Analysts are forecasting total revenue of $490.1 million for the year, a decline of 9% from last year’s revenue of $538.5 million.

Stock Price Performance: Between September 26, 2012 and October 24, 2012, the stock price dropped 44 cents (-8.6%), from $5.09 to $4.65. The stock price saw one of its best stretches over the last year between December 12, 2011 and December 21, 2011, when shares rose for eight straight days, increasing 21.3% (+70 cents) over that span. It saw one of its worst periods between May 1, 2012 and May 9, 2012 when shares fell for seven straight days, dropping 7.7% (-33 cents) over that span.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 2.3% in the third quarter of the last fiscal year, 4.2% in fourth quarter of the last fiscal year and 6.7% in the first quarter and then fell again in the second quarter.

The company is looking to get back on track with this earnings announcement after a profit drop last quarter snapped a positive string of results. Net income rose 3268% in the fourth quarter of the last fiscal year and 42.2% in the first quarter before dropping in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.76 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 0.78 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 12.4% to $84.4 million while assets rose 8.9% to $64.1 million.

Analyst Ratings: With five analysts rating the stock a buy, none rating it a sell and one rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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