Sonic Q3 Profit Down, But Tops View - Update

(RTTNews) - Sonic Corp. (SONC), one of the largest chain of drive-in restaurants in the US, Thursday reported a drop in profit for the third quarter hurt largely by lower margins and lower-than-expected revenues. Nevertheless, earnings for the quarter trumped estimates by a penny.

However, moving ahead, the company expects "macroeconomic environment" might impact its results for the full year, sending its shares down 5 percent in the after hours trade.

Oklahoma City-based Sonic's third-quarter profit dropped to $15.4 million or $0.31 per share from $20.4 million or $0.38 per share last year.

Excluding items, adjusted earnings for the quarter were $0.43 per share, up from $0.36 per share last year. On average, 15 analysts polled by Thomson Reuters expected earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter quarter grew to $165.2 million from $164.7 million last year. Analysts had a consensus revenue estimate of $166.2 million for the quarter.

System same-store sales increased 2.0 percent for the quarter. Company drive-in margins dropped by 40 basis points. The company said sixteen new franchise drive-ins were opened in the quarter.

"Although consumer trends slowed somewhat in April and May, our business performed well during the quarter overall, generating 2.0% same-store sales growth for the system and adjusted earnings per share growth of 19%," said CEO Cliff Hudson.

Looking forward to the full year 2016, Sonic expects adjusted earnings growth of 20 to 25 percent.

SONC closed Thursday's trading at $30.35, up $0.85 or 2.88%, on the Nasdaq. The stock further dropped $1.30 or 4.28% in the after-hours trade.