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Shares of Papa John's drop after accounting error

NEW YORK (AP) -- Shares of Papa John's International fell Wednesday after the pizza chain operator reported fourth-quarter results that missed Wall Street expectations and restated earnings back to 2009 after discovering an accounting error.

THE SPARK: After the market closed Tuesday, Papa John's said the restated results lowered 2011 results by 4 cents a share, to $2.16; raised 2010 results by 3 cents a share, to $1.99; and lowered 2009 results by 13 cents per share, to $1.93. The company said the error related to accounting in one of its joint ventures.

THE BIG PICTURE: The Louisville, Ky., company said in a regulatory filing that it found a material weakness in its internal controls and it is implementing remedial measures including a review of joint venture agreements. The company noted that the "corrected accounting treatment" isn't expected to have a meaningful impact on operating results going forward.

In the fourth quarter, Papa John's net income rose to $18.4 million, or 74 cents per share. That compares with $16.8 million, or 65 cents per share, a year earlier. Adjusted earnings were 62 cents per share, accounting for an additional week of operations in 2012 versus 2011.

Sales increased to $367.3 million from $306.2 million

Analysts expected profit of 75 cents per share on sales of $355.4 million.

Sales at stores open for at least a year rose 5.2 percent in North America and 7 percent internationally.

SHARE ACTION: Papa John's shares were down $5.86, or 10.3 percent, at $50.79 in afternoon trading.