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Darden Restaurants Shares Plunge as Company Cuts Forecast (DRI)

Full service restaurant chain operator Darden Restaurants, Inc. ( DRI ) on Tuesday lowered its 2012 earnings outlook, sending its shares plummeting in premarket trading.

The Orlando-based company, which operates the Red Lobster, Olive Garden, and LorngHorn Steakhouse chains, said it now expects full-year 2012 profits to rise 4% to 7%, way down from a previous estimates for 12% to 15% growth.

Darden also now sees full-year sales growth of 6% to 7%, compared with a prior outlook of 6.5% to 7.5% growth.

For the current fourth quarter, the company forecast earnings of 41 cents per share, which would badly miss analysts' estimates for 54 cents.

Darden Restaurants shares fell $3.73, or -7.8%, in premarket trading Tuesday.

The Bottom Line

Shares of Darden Restaurants ( DRI ) have a 3.60% dividend yield, based on last night's closing stock price of $47.73. The stock has technical support in the $42-$44 price area. If the shares can firm up, we see overhead resistance around the $48-$50 price levels.

Darden Restaurants, Inc. ( DRI ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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