NEW YORK (TheStreet) -- Shares of Sonic Corp (SONC) were up 2.24% to $33.30 on heavy volume in afternoon trading Friday, ahead of the casual restaurant chain's fiscal third quarter earnings release, expected after the market closes on Monday.
Wall Street analysts are expecting profits of 36 cents per share for the quarter, an improvement from the 30 cents it reported in the same quarter of last year.
Revenue is expected by analysts to come in at $164.17 million, up from the $152.19 million Sonic posted a year ago.
About 801,708 shares have exchanged hands as of 1:29 p.m. ET today, compared to its average trading volume of about 726,287 shares a day.
Oklahoma City-based Sonic operates and franchises a chain of drive-in restaurants serving food items, such as specialty drinks, ice cream desserts, made-to-order sandwiches and hamburgers, hot dogs, hand-battered onion rings, tater tots and wraps.
Separately, TheStreet Ratings team rates SONIC CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SONIC CORP (SONC) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 15.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SONIC CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SONIC CORP increased its bottom line by earning $0.85 versus $0.64 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.85).
- 36.91% is the gross profit margin for SONIC CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.07% trails the industry average.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 41.03% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- You can view the full analysis from the report here: SONC Ratings Report