The company cited several factors for the reduction, including delays in new restaurant opening dates that will reduce fourth-quarter results by about 6 cents a share. Also, management concluded negotiations to secure early lease termination and close the last of its money-losing restaurants. The company said this will adversely affect fourth-quarter earnings by 3 cents a share, but will be accretive in 2007. Looking ahead to 2007, the company forecast earnings to range from $1.31 to $1.33 a share. Wall Street is looking for earnings of $1.38 a share. Shares were trading down $3.37, or 10.7%, to $28.21.
Dolby Labs (DLB - Get Report) climbed after the San Francisco-based audio engineering company flew past targets and raised sights for its fiscal 2007. The company posted a pro forma profit of $25.2 million, or 61 cents a share, for the fiscal fourth quarter ended Sept. 29. Those numbers compare with an adjusted profit of $26.8 million, or 15 cents a share, in the year-ago period. Total sales for the quarter were $102.1 million, a 29% improvement from the $78.9 million revenue level a year ago. Analysts were looking for an 11-cent-a-share adjusted profit on $83.8 million in sales.
For fiscal year 2006, Dolby reported total revenue of $391.5 million, compared to $328 million for prior year. Looking ahead, the company expects total sales for the 2007 fiscal year to hit somewhere between $420 million and $450 million. That is well above Wall Street's $405 million consensus target. Shares were trading up $3.75, or 19%, to $23.49.