DUBLIN, Ohio (AP) — The Wendy’s Co. returned to a first-quarter profit as it recorded a large gain on the sale of an investment. But the casual dining chain’s results missed analysts’ expectations and it cut its 2012 forecast.
Wendy’s stock dropped more than 2 percent in premarket trading.
For the period ended April 1, Wendy’s said Tuesday that its net income amounted to $12.4 million, or 3 cents per share, versus a net loss of $1.4 million, or breakeven results, a year ago.
Excluding certain items, earnings were 1 cent per share. But analysts polled by FactSet expected higher earnings of 3 cents per share.
Revenue rose 2 percent to $593.2 million from $582.5 million. That fell short of Wall Street’s estimate for revenue of $608.1 million.
Revenue at company-run restaurants in North America open at least 15 months and renovated restaurants reopened at least three months climbed 0.8 percent in the quarter. The figure increased 0.7 percent for franchise restaurants.
Wendy’s said its company-run restaurant margin fell due to increased commodity costs, particularly for fresh beef.
The Dublin, Ohio company cut its 2012 adjusted earnings from continuing operations guidance mostly because of weaker-than-expected sales and the company-run restaurant margin. Wendy’s now expects adjusted earnings from continuing operations in a range of $320 million to $335 million. It previously predicted $335 million to $345 million.
Wendy’s said its outlook excludes items such as anticipated debt extinguishment costs, and relocation costs and other expenses from the consolidation of the Atlanta restaurant support center with the Dublin restaurant support center.
Wendy’s had 6,581 restaurants at quarter’s end.
Its shares fell 13 cents, or 2.7 percent, to $4.74 per share in premarket trading on Tuesday. Its shares have traded in a 52-week range of $4.29 to $5.62.
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