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business newsSilver Lining: Papa John's Delivers
Company serves up good guidance.
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Get ready to feast your eyes on some good news - which we could all use right about now.
The Kentucky-based company turned in an adjusted profit of $0.48 a share. Now that was lower than the $0.54 a share it served up (get it?) in the comparable period the year before, but was well north of the $0.41 a share that analysts had been looking for.
On the flip side, revenues came in at about $279.6 million, which appeared a bit shy of expectations. But frankly, I don’t view that as a big issue because of the big bottom line beat and what I thought was an upbeat forward outlook.
My eyes naturally gravitated toward the following line in the release: “The company is increasing its 2009 earnings per diluted share guidance from the previous range of $1.32 to $1.40 to an updated range of $1.36 to $1.44.”
Look, I don’t know about you, but I think it’s rather nice to see a company ratcheting up its guidance these days. It's kind of counter to what we’ve become used to and it’s bound to catch a lot of retail and institutional interest as a result.
Another big positive is that the Street was at $1.35, so I think there's a chance some analysts could be cranking up their estimates in the days ahead. Not a bunch, to be clear - but I do think there will be some cranking going on.
Oh, and I almost forgot: The company has bought back lots of stock in the past year. I think that deserves a mention too. The following 2 lines regarding repurchase activity were of interest to me:
“The company repurchased 1.4 million shares of its common stock at an average price of $26.93 per share, or a total of $37.7 million, during 2008 (no significant repurchases in the fourth quarter).
“Subsequent to year-end, through February 17, 2009, the company repurchased an additional $4.8 million of common stock (264,000 shares at an average price of $17.98 per share) under its Rule 10b5-1 trading plan.”
You can slice and dice (again, get it?) that news anyway you like. But in my view, I don’t think it would be spending its money on the shares, especially in this environment, unless it thought they were a bargain. Call me crazy but I see it as a positive.
With all that in mind, there's one thing that kind of irks me. I took a gander at the insider data and noticed that executives haven't exactly been bellying up to the bar in a big way over the last 6 months. Why is that? In fact, with the exception of a 500-share purchase toward the latter part of 2008, things actually looked kind of sparse.
Hey, anyone else out there hungry?
Have a great day!
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