Sonic Profit Rises In Line; Stock Up - Update

(RTTNews) - Sonic Corp (SONC), the U.S.' largest chain of drive-in restaurants, Monday reported a higher second-quarter profit, aided by improved margins even as revenue came in soft. Earnings for the quarter matched Wall Street estimates, but revenue fell short of expectations.

For fiscal year 2014, Sonic expects earnings per share to grow 14 percent to 15 percent from last year and estimates positive same-store sales in the low single digit range for the system in 2014.

Sonic shares touched a new high in a year - up 6.12 percent at $22.20 in after-hours trading on the Nasdaq.

CEO Cliff Hudson said the results were despite the inclement weather that impacted wide parts of the U.S.

Harsh winter weather across the U.S. forced customers to stay indoors, thereby impacting the fortunes of various sectors in the economy.

But Hudson said prospects appear bright, with the company banking on innovative products and the signing up of new franchise development agreements. Hudson expects the company to open 40 to 50 new franchise drive-ins in 2014.

Oklahoma City-based Sonic posted second-quarter net income of $4.1 million or $0.07 per share, compared with $3.6 million or $0.06 per share last year.

On average, 17 analysts polled by Thomson Reuters estimated earnings of $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter declined to $109.74 million from $111 million a year ago. Analysts expected revenue of $110.94 million for the quarter.

System-wide same-store sales increased 14 percent for the quarter.

Results were largely due to expenses that decreased to $97 million from $99 million in the prior year. Further, interest expense was lower by about $1.5 million.

Company drive-in margins were up 80 basis points.

Sonic stock closed Monday at $20.92, down $0.35 or 1.65%, on a volume of 1 million shares. In after hours, the stock gained $1.28 or 6.12% at $22.20.