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Starbucks Partners Google for Faster Wi-Fi

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Starbucks Corporation (SBUX) recently announced that it has teamed up with Google, Inc. (GOOG) to boost Wi-Fi speed at Starbucks locations.

Both companies will work together to develop the next generation Starbucks Digital Network, in order to facilitate faster Internet speed, effective from Aug 2013. In addition, Starbucks will upgrade their store network and Wi-Fi connection at over 7000 stores over the next 18 months.

Starbucks and Google will collaborate with Level 3 Communications (LVLT), an international telecommunications company, in order to execute this Wi-Fi connectivity upgrade at Starbucks stores.

A significant number of customers depend on the Wi-Fi networks in Starbucks stores for their work and other purposes. The network upgrade will serve these customers better and increase traffic in the stores.    

Recently, Starbucks delivered solid third-quarter fiscal 2013 results, beating the Zacks Consensus Estimate for both revenues and earnings. Robust increase in global traffic, increasing popularity of its Starbucks loyalty cards, efficiency improvements, cost controls and lower coffee costs boosted profits.

Starbucks’ adjusted earnings of 55 cents per share for the third quarter of fiscal 2013 grew 28% year over year and also beat management’s expectations, driven by solid sales performance and significant margin growth.

Total sales for the third quarter increased 13% year over year to $3.74 billion and also surpassed the Zacks Consensus Estimate of $3.72 billion. Strong comps in the U.S. and Asia-Pacific and significant improvement in Europe drove the top line in the quarter.

The company raised earnings expectations for the fourth quarter and fiscal year 2013 and also issued an impressive guidance for fiscal 2014.

Starbucks carries a Zacks Rank #2 (Buy).

Other specialty restaurateurs such as Burger King Worldwide, Inc. (BKW) and Cracker Barrel Old Country Store, Inc. (CBRL) are also doing well and have a bright outlook. Both stocks carry a Zacks Rank #2 (Buy).

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