Sonic Misses Earnings, Sells Off Sharply
Fast Food Restaurant Sonic Corp. (SONC) reported Q1 earnings of $0.10 / share Tuesday after the close, falling short of analyst estimates of $0.13 / share. Revenues fell 25.9% year over year due largely to unemployment and an intense promotional environment. Profits were down 13%.
Guidance did nothing to help burger joint’s shares, as management forecast that earnings would not grow at all in 2010.
Shares were hit hard on all of this bad news, plunging 8.88% after hours following a 0.39% daily decline. If the stock opens tomorrow where it is now, it will be right atop the upper support line delineated below. As you can see, shares have bounced off of this level several times in the past few months. If it breaks through, there won’t be anything there to buoy shares until it reaches the area of the lower support line, situated at $8.48. If it breaks through there, well, goodnight nurse.
You’d be prudent to avoid this stock for a while, unless of course you’re looking to short it if it breaks $9.30.
Disclosure: No positions in SONC.
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