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.
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