bkc

Jack in the Box (JACK) dropped in yesterday's after-hours session upon news of the company's Q4 results. You can't blame the bottom line for the poor stock performance. The fast-food joint earned 70 cents per share from continuing operations versus the 45 cents per share from continuing operations earned in the comparable quarter. Did such a growth rate deserve a nearly 6% cut in share price? Analysts were only looking for 55 cents per share, according to Earnings.com.

Well, Wall Street apparently wasn't satisfied with the outlook, as this Reuters article points out. Traders are obviously more concerned with where Jack in the Box may be heading as opposed to where it's been.

Interesting little battle shaping up in the fast-food realm, and it isn't between restaurants -- it is within one. According to the Associated Press, Burger King (BKC) franchisees are suing the company over its recent $1 double cheeseburger promotion.

The reason for the lawsuit is that the franchisees are losing money on the deal because the company is setting maximum menu prices, which Burger King is not allowed to do. The National Franchise Association (NFA), which represents more than 80% of Burger King's U.S. franchise owners, says that the promotion is forcing restaurant owners to sell the quarter-pound burger at a 10-cent loss. One Burger King franchisee said that the burger in question typically costs franchisees $1.10.

Here are some highlights from last week's earnings coverage from BloggingStocks:

• AK Steel Holding Corp. (NYSE: AKS) reported better-than-expected Q3 results but shares fell anyway.
• Baidu Inc. (NASDAQ: BIDU) posted strong Q3 results but shares sold off on a disappointing guidance.
• Burger King Holdings Inc. (NYSE: BKC) said lower Q1 earnings fell short of analysts expectations.
• Dreamworks Animation SKG Inc. (NYSE: DWA) topped Q3 profit and revenue estimates, lifting shares.
• Geron Corp. (NASDAQ: GERN) posted a narrower-than-expected Q3 loss, sending shares sharply higher.
• Honda Motor Co. Ltd. (NYSE: HMC) reported lower Q2 earnings and sales on weak demand for cars.

Even the cheap stuff gets cut when jobs are scarce. Burger King (NYSE: BKC), the second largest burger chain, saw fiscal first quarter profit fall 6% year-over-year, as diners opted to make their own meals at home.

Another part of the problem, though, is that competitors have cut their prices aggressively in order to bring customers through the door, a move that can have an upside for market share but doesn't always restore revenue lost to a recession.

Burger King Holdings Inc. (NYSE: BKC) announced plans Wednesday to overhaul its 12,000 locations worldwide. The fast-food giant is seeking a sleeker, futuristic look that includes LCD-screen menus, rotating chandeliers, and corrugated metal and brick accents (see pictures at the above link) on the inside, as well as metal canopies and additional signs on the exterior.

The new upscale design, called 20/20, is expected to cost franchisees between $300,000 to $600,000 per restaurant. Some 60 locations have already been remodeled, including in Miami, Mexico City, Edinburgh, and Shanghai, and 75 more are expected to be completed by the end of 2010. All new restaurants will be built using the 20/20 design.

Yum! Brands (NYSE: YUM), which competes with McDonald's (NYSE: MCD), Burger King (NYSE: BKC), and Wendy's/Arby's Group (NYSE: WEN) for the right to feed consumers on the go around the world, issued a Q3 report after the bell on Tuesday that was decent in many respects. Earnings per share on an adjusted basis increased over 20% to 70 cents. This performance absolutely embarrassed the analysts, who were looking for a mere 58 cents per share according to our earnings preview.

So, that was one of the decent parts. Actually, I'd say it was a little more than decent. But, unfortunately, the top line didn't grow. Total revenues actually declined 2%.

At the time of this writing, shares of Yum! Brands (NYSE: YUM), a company that competes with McDonald's (NYSE: MCD), Burger King (NYSE: BKC), and Wendy's/Arby's Group (NYSE: WEN), were trading higher by well over 4%. Volume was doing well, too. Interestingly enough, Yum! Brands will be reporting Q3 earnings on Tuesday, October 6, after the bell. Does this mean that you should buy in ahead of the release?

On the surface, I suppose the market is telling you that Yum! Brands would indeed make a good earnings trade. Not only is the stock up nicely this afternoon, but it isn't too far from a 52-week high.

There are no sure-fire gains in trading or investing, even if the company's/sector's data is pointing to a move higher or lower. The short of Aeropostale (NYSE: ARO), recommended on May 15, 2009 at a price of $31, has been stopped out at $42, and the short of Burger King (NYSE: BKC), recommended on the same day at a price of $17.35, has failed to make the new lows envisioned.

Aeropostale posted record Q2 results, and recently announced a 9% increase in August same-store sales, despite a cluttered sector (young-teenager casual apparel, accessories), and the "frugal consumer" era.

If you're trying to get your head around some stock strategies for the upcoming fall trading season, you might want to consider dividend yields. Volatility could increase since we've had such a run-up in many equities, so thinking about payouts is probably advisable.

I was looking around for some higher-yielding blue chips and became interested in McDonald's (NYSE: MCD). As of last Friday's closing price, McDonald's yields almost 3.6% on an annual basis. It pays out 50 cents per share per quarter according to its corporate website.

Here are some highlights from last week's earnings coverage from BloggingStocks:

• American Eagle Outfitters Inc. (NYSE: AEO) Q2 profit fell short of estimates as same-store sales declined.
• Ann Taylor Stores Corp. (NYSE: ANN) Q2 earnings beat very low expectations and same-store sales fell.
• Big Lots Inc. (NYSE: BIG) reported better-than-expected numbers for Q2, sending shares upward.
• Burger King Holdings Inc. (NYSE: BKC) posted a better-than-expected Q4 profit though revenue declined.
• China Petroleum & Chemical Corp. posted a record Q2 profit after restrictions on fuel prices were lifted.
• Dell Inc. (NASDAQ: DELL) said its Q2 earnings declined, but they still topped analysts' expectations.

Burger King Holdings (NYSE: BKC) is on the upswing today after the fast-food chain topped analysts' earnings expectations. In its fiscal fourth quarter, the burger baron banked a profit of $58.9 million, or 43 cents per share, representing a 16% increase from the year-ago period. Revenue dipped 2% to $629.9 million, while same-store sales fell by 2.4%. By contrast, analysts were looking for a profit of just 33 cents per share on $632 million in revenue.

Looking ahead, the restaurant chain warned that it expects sales to be soft through Christmas. As a result, Burger King declined to issue specific earnings guidance for the current fiscal year. Additionally, the company plans to slow the pace of its new store openings; rather than the 360 new outlets opened in fiscal 2009, Burger King is targeting 250 to 300 openings in fiscal 2010.

Yum! Brands (NYSE: YUM), a chain of restaurant trademarks that competes with McDonald's (NYSE: MCD), Burger King (NYSE: BKC), and Wendy's/Arby's Group (NYSE: WEN), delivered up a nice hot serving of earnings on Tuesday after the bell.

For the second quarter, net sales dropped 7%. Earnings on an adjusted basis increased 10% to 50 cents per share. This was actually much better than analysts' expectations. Wall Street was only counting on 43 cents per share, according to Bloomberg. However, the market is always looking forward, so there was a bit of bad news in terms of guidance pertaining to same-store sales.

Analyst upgrades:

• Jefferies upgraded VMware (NYSE: VMW) to Hold from Underperform on expectations June quarter revenue will be inline-to-slightly-better and negative revisions to September quarter revenue will not be as great as in the most recent two quarters. The firm raised its target on shares to $25 from $20.
  
• Citigroup upgraded Blue Nile (NASDAQ: NILE) to Buy from Hold on valuation following the recent pullback and believes expectations for Q2 are reasonable. The firm has a $50 price target on the stock.
  
• FBR Capital upgraded Bronco Drilling (NASDAQ: BRNC) to Market Perform from Underperform on valuation as it believes negative sentiment will ease. The firm raised its target on shares to $4 from $3.
• Unilever (NYSE: UL) was upgraded to Overweight from Neutral at JP Morgan.
  
• Posco (NYSE: PKX) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  
• Gol Linhas Aereas (NYSE: GOL) was upgraded to Buy from Underperform at BofA/Merrill.

Ruby Tuesday (NYSE: RT) reported Q4 results on Tuesday (hey, what day did you expect the company to do it on?) after the bell. By the looks of the price action going into the report, as well as the price action after the report, you would have thought that the results were incredible. They were, in terms of an earnings beat, but other aspects of the report gave me pause.

Ruby Tuesday made 28 cents per diluted share during the fourth quarter. According to Reuters, analysts were only looking for 20 cents of per-share profit. Okay, so we know why Wall Street was so excited. Beating by 8 cents is impressive.

Sonic (NASDAQ: SONC), a fast-food chain whose colleagues include Burger King (NYSE: BKC), McDonald's (NYSE: MCD), Wendy's/Arby's Group (NYSE: WEN), and Yum! Brands (NYSE: YUM), reported earnings for the third quarter on Tuesday after the bell. The shares have done well today on the news. As I write this, Sonic's stock is up well over 12% in afternoon trading. Volume is great. Do you want to get in on the action?

Sonic said it earned an adjusted 24 cents per share. This article reported expectations as being $0.20 per share, so management beat the bottom line by a nice amount. We'll throw that result on the positive side of the line.