Dim Profit Expectations Send CKE Stock Tumbling
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Shares of CKE Restaurants Inc., the Anaheim-based parent of the Carl’s Jr. and Hardee’s burger chains, plummeted 16%, to $6.06, in New York Stock Exchange trading Friday. The downturn came a day after the company warned for the fourth straight quarter that profits won’t meet expectations. CKE shares also were downgraded to “neutral” from “outperform” by an analyst at Morgan Stanley Dean Witter.
CKE said Thursday that it will eliminate 150 jobs at its Hardee’s headquarters in North Carolina and move those positions to CKE headquarters in Anaheim.
Shares of CKE, the fourth-largest burger chain in the nation, topped $40 in 1998. But they have fallen as low as $5.88 over the past year. The chain expects to report earnings of $2.6 million to $4.2 million in its third quarter, which ended Nov. 1.
Analysts had expected a profit of about $9.9 million, or 19 cents a share. During last year’s third quarter, CKE earned $19 million, or 39 cents a share.
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