February 5, 2008

Wendy's Q4 net soars as losses hurt previous year revenues

Wendy's International reported that is fourth-quarter net income more than quadrupled on a year-earlier loss from discontinued operations despite flagging sales and higher commodity costs.

The fast-food chain, which has been weighing a possible sale for nearly a year, reported net income of US$14.1 million, or 16 cents a share, from US$3 million, or 3 cents a share, in 2007.

The prior year had US$7.9 million in restructuring charges and a 6-cents-a-share loss from discontinued operations. 

Excluding items, earnings from continuing operations rose to 21 cents a share from 14 cents a share a year earlier as total costs and expenses fell 3.4 percent. Gross profit margin rose to 45.3 percent from 44.5 percent. 

Analysts surveyed by Thomson Financial estimated earnings of 23 cents a share on revenue of US$592.4 million. 

In April, Wendy's has announced it might sell itself. Until last week, the company announced the committee was in the "final stages" of a decision without any indication of forthcoming action. The announcement left investors to question whether the company ever would be sold.