NEW YORK -- Shares of Sonic Corp. advanced Wednesday after the company said its net income rose 18 percent in its fiscal fourth quarter, helped by tighter cost controls at its drive-in restaurants.
THE SPARK: The Oklahoma City company's earnings beat Wall Street expectations. Sonic reported net income of $14.5 million, or 25 cents per share, in the three-month period that ended Aug. 31. That compares with $12.3 million, or 20 cents per share, in the year-ago quarter.
THE BIG PICTURE: Sonic, which has more than 3,500 drive-ins across the country, said revenue at restaurants open at least a year rose 2.3 percent for the quarter. The measure is a key indicator of health because it excludes the impact of newly opened or closed stores.
The company said it expects sales at established restaurants to grow in the mid-single digits. It expects an uptick in new franchise drive-in openings from 2012.
Sterne Agee analyst Lynne Collier kept her "buy" rating on the company, noting that Sonic could produce double-digit earnings per share growth in 2013 as a result of new products and advertising. She raised her estimate for fiscal 2013 to 68 cents per share, from 65 cents per share.
SHARE ACTION: The stock was up 35 cents, or 3.6 percent, at $10.05 in midday trading. Its shares hit a 52-week high of $10.94 in mid-July.