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Denny's shares slump following 2Q report

NEW YORK (AP) -- Shares of Denny's Corp. fell Tuesday after the restaurant operator reported second-quarter results that fell below market expectations.

Denny's said its net income rose to $6.2 million, or 7 cents per share, for the three months ended June 26. That compared with $4.6 million, or 5 cents per share in the 2012 second quarter.

Revenue fell 7 percent, to $116.6 million, from $124.7 million last year.

Analysts, on average, had projected earnings of 8 cents per share on $116.8 million in revenue, according to FactSet.

Denny's shares lost 25 cents, or 4.3 percent, to end Tuesday trading at $5.59, toward the higher end of its 52-week trading range of $4.28 to $6.24.

Revenue from company-owned restaurants fell 9 percent to $82.8 million, while revenue from franchised locations and licenses edged up a fraction to $33.7 million. Denny's had a total of 1,690 restaurants at the end of the period.

The Spartanburg, S.C., company said sales at stores open at least a year rose 0.6 percent. Sales at franchised restaurants improved and weakened at company-owned locations. Sales at locations open at least a year is considered an important measurement of retailer health because it leaves out results from stores that have opened or closed within the last year.

Roth Capital Markets analyst Anton Brenner said it does not look like sales at restaurants open at least a year will pick up any time soon, and Denny's stock won't trade higher unless there's evidence sales are improving. He lowered his rating on the stock to "Neutral" from "Buy."