California Pizza Kitchen Rises On Outlook, Upgrade

NEW YORK (AP) — Shares of California Pizza Kitchen Inc. rose on Thursday, after the casual dining chain lifted its third-quarter profit outlook and an analyst upgraded the stock.

The stock rose $1.29, or 9.2 percent, to $15.31 in midday trading.

On Wednesday, California Pizza Kitchen said improvements in efficiency and a lower tax rate will assist results in the third quarter, and it raised its outlook.

The company now expects to report earnings of 22 cents to 24 cents per share for the quarter, up from its previous forecast of 19 cents to 21 cents.

Analysts surveyed by Thomson Reuters forecast a profit of 21 cents per share for the quarter.

KeyBanc analyst Brad Ludington raised his rating on the stock to "Buy" from "Hold."

Ludington said it was a good decision for the company to stand firm on pricing because lowering prices would damage the brand in the long-term.

The analyst also said that an 8 percent decline in sales at existing stores during the third quarter represent a bottom for the company.

An expanded wine list, lower commodity and energy costs, and a call center to help with take-out orders are other benefits, as well, Ludington said.