ATLANTA ( TheStreet) -- Wendy's Arby's ( WEN - Get Report) booked a surprise loss in its most recent quarter as revenue came in weaker than expected.

Fast-food chain operator Wendy's Arby's adjusted its forecast, saying 2010 results would likely be toward the low end of its previously announced guidance.

Investors voiced their disapproval, bidding Wendy's shares 3.8% lower ahead of midday on Friday.

"These third-quarter results are simply not satisfactory to us," conceded CEO Roland Smith, who said the quarter was "a difficult one" both for its Wendy's and Arby's brands of fast food restaurants.

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Despite its weak quarterly results, Wendy's Arby's upped its quarterly cash dividend by half a penny per share to 2 cents. The higher dividend will be paid next on Dec. 15 to shareholders of record on Dec. 1.

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At Wendy's restaurants, comparable same-store sales, or sales at stores open at least one year -- a closely watched metric in the restaurant industry -- fell 1.7%, with the lack of growth resulting in "sales deleverage." That deleverage, coupled with higher commodity costs, led margins to fall by 200 basis points year-over-year.

Comps fell 5.9% at Arby's restaurants. Margins fell 170 basis points, impacted by sales deleverage and higher commodity costs.

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Smith said the company continued to work on its long-term growth potential, expanding its breakfast platform at Wendy's, remodeling stores of both brands, and expanding internationally.

The CEO added that the Arby's brand turnaround remained a key focus and was showing some progress with comps up 5.5% in October. Wendy's and Arby's merged in a $2 billion deal in September 2008.

Arby's recently launched a value menu to better compete with Burger King, McDonald's ( MCD - Get Report), Jack in the Box ( JACK - Get Report) and other restaurant sector rivals.

McDonalds grew comps 6% globally last quarter, and 6.5% in October.

Wendy's Arby's swung to a quarterly loss of $900,000, or flat on a per-share basis, compared with year-earlier earnings of $14.7 million, or 3 cents per share.

Consolidated revenue was $861.2 million in the quarter, down 4.7% year-over-year.

The company now expects fiscal 2010 adjusted earnings before interest, taxes, depreciation and amortization to be at the lower end of its previously announced range, which was for a 3% to 5% decline compared with fiscal 2009 EBITDA of $411.6 million. Analysts' consensus call was for EBITDA of $400.2 million for fiscal 2010.

Same-store sales at Wendy's North America company-operated restaurants are expected to decline 1% in fiscal 2010. Arby's should post negative same-store sales but show a year-over-year improvement.

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Analysts from UBS reiterated a neutral rating on Wendy's Arby's shares several days ahead of its earnings announcement, raising their price target on the stock by 50 cents to $5.

Deutsche Bank's Jason West had a buy rating on Wendy's Arby's ahead of its report.

He told TheStreet last month he liked Wendy's because it's one of the cheapest stocks in the sector on an EV/EBITDA (enterprise value over earnings before interest, tax, depreciation and amortization) basis at 6.7 times fiscal 2011 expected earnings, compared with the overall quick-service sector at 8.3 times fiscal 2011 expected earnings. He said the Wendy's brand is worth a conservative $4.40 per share.

The Arby's brand's sales were approaching a bottom, and he raised his same-store-sales forecast on the brand concept known for roast beef sandwiches. He expected Wendy's comps to be flat-to-up slightly in the third quarter, while Arby's comps were expected to be down slightly.

Another upside, in the analyst's view, was that expectations were low for Wendy's Arby's, given that management guided down for the second half of the year.

West predicted commodity costs would be a headwind, but said comparisons would be easier in 2011.

He advised investors to keep a watchful eye on rumors that have been circulating on Wall Street that Wendy's could be ripe for a private equity buyout.

The stock was down 4.7% year-over-year before speculative rumors hit The Street in mid-October. At such a low price point, Wendy's is likely viewed as a potential bargain for private equity groups willing to take it over and attempt to turn its operations around for the better.

Morningstar analyst Joscelyn MacKay noted earlier this fall that Wendy's is indeed a ripe takeover target and may be next to be taken private, adding that a Wendy's buyout remains purely speculative while conceding that the company said in a June regulatory filing that it had received a third party inquiry about a possible deal.

West noted last month that Wendy's is "one of the best values" in the restaurant space.

-- Written by Miriam Marcus Reimer in New York.

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