Darden Restaurants Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Darden Restaurants (NYSE:DRI) will unveil its latest earnings on Thursday, December 20, 2012. Darden Restaurants operates a full-service dining restaurant industry in the United States.

Darden Restaurants Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 26 cents per share, a decline of 36.6% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 46 cents. Between one and three months ago, the average estimate was unchanged. It has since dropped over the last month. For the year, analysts are projecting net income of $3.38 per share, a decline of 5.6% from last year.

Past Earnings Performance: Last quarter, the company topped estimates by 0 cents, coming in at profit of 85 cents per share against a mean estimate of net income of 83 cents. The company fell in line with estimates in the fourth quarter of the last fiscal year.

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Wall St. Revenue Expectations: On average, analysts predict $1.95 billion in revenue this quarter, a rise of 6.6% from the year-ago quarter. Analysts are forecasting total revenue of $8.59 billion for the year, a rise of 7.4% from last year’s revenue of $8 billion.

A Look Back: In the first quarter, profit rose 3.9% to $110.8 million (85 cents a share) from $106.6 million (78 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 4.8% to $2.03 billion from $1.94 billion.

Analyst Ratings: There are mostly holds on the stock with 14 of 25 analysts surveyed giving that rating.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 8.5% in the third quarter of the last fiscal year and 10% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 6.1% in the second quarter of the last fiscal year, 9.3% in the third quarter of the last fiscal year and 3.8% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.39 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 0.43 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 4.9% to $1.86 billion while assets decreased 4.1% to $726.8 million.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)