NEWS: DineEquity, which owns Applebee's and IHOP, said Tuesday that its third-quarter net income fell 69 percent as the prior-year period included a large gain related to the sale of restaurants to franchisees.
The company's adjusted profit and revenue beat Wall Street's expectations, and it gave a fiscal 2013 profit forecast above analysts' estimates.
The stock jumped to a new all-time high in morning trading.
DETAILS: Revenue at IHOP locations open at least a year climbed 3.6 percent on an increase in the average check.
Revenue at Applebee's locations open at least a year dipped 0.4 percent on weaker traffic, which was somewhat offset by a higher average check.
Revenue at locations open at least a year is a key indicator of a restaurant operator's health because it excludes results from locations recently opened or closed.
NUMBERS: DineEquity earned $18.4 million, or 97 cents per share, for the three months ended Sept. 30. A year earlier the company earned $58.7 million, or $3.14 per share.
The prior-year period included a $73.7 million gain on the sale of nearly 100 of its restaurants to franchisees.
Removing certain items, earnings for the latest quarter were $1.10 per share. Analysts predicted earnings of 92 cents per share, according to a FactSet poll.
Revenue dropped 25 percent to $161.3 million from $216.3 million as franchise and restaurant revenue declined. DineEquity transitioned to a fully franchised model last year, a move intended to cut down on overhead costs, free up capital and boost profit margins.
Wall Street called for revenue of $157.1 million.
FUTURE: The Glendale, Calif., company foresees fiscal 2013 adjusted earnings in a range of $4.14 to $4.24 per share. Analysts expect full-year earnings of $3.98 per share.
DineEquity now anticipates revenue at IHOP locations open at least a year will be up 2 percent to 3 percent. Its prior guidance was for the figure to be down 1.5 percent to up 1.5 percent.
Revenue at Applebee's locations open at least a year is now expected to be down 0.5 percent to up 0.5 percent. Previously, the company predicted the metric would be down 1.5 percent to up 1.5 percent.
STOCK: Shares of DineEquity Inc. soared 11 percent, or $7.86, to $79.36. The stock touched a fresh all-time high of $80.12 earlier in the session.