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UPDATE 2-CEC Q4 profit misses est, cuts FY 2010 earnings view
February 25, 2010 / 9:36 PM / 8 years ago

UPDATE 2-CEC Q4 profit misses est, cuts FY 2010 earnings view

* Q4 EPS $0.24 vs est $0.25

* Revenue $187.6 mln vs est $185.9 mln

* Cuts FY 2010 EPS view to $2.68-$2.78

* Sees Q1 comp sales slightly negative to up 1 pct

* Expects pressure on labor and food lines in 2010 (Adds conference call details, updates share movement)

BANGALORE, Feb 25 (Reuters) - CEC Entertainment Inc CEC.N, which owns the Chuck E Cheese’s restaurant chain, reported a quarterly profit that missed Wall Street estimates by a penny, hurt by higher costs, and cut its fiscal 2010 earnings view.

The company, which competes with larger rivals Domino’s Pizza Inc (DPZ.N) and Yum Brands Inc’s (YUM.N) Pizza Hut, now sees earnings of $2.68 to $2.78 a share for fiscal 2010, down from its prior view of $2.70 to $2.80 a share.

Analysts on average were expecting earnings of $2.82 a share, before items, according to Thomson Reuters I/B/E/S.

The company said it expects “slight pressure” on the food and labor cost lines for 2010, due to the volatility in cheese prices and anticipated increase in minimum wage and unemployment taxes.

The company expects same-store sales to be slightly negative to up 1 percent for the first quarter, due to difficult comparisons in the final period of the quarter.

“In light of the external environment, we continue to remain cautious in our near-term outlook for the business,” chief financial officer Christopher Morris said on the call.

The company expects same-store sales to rise 1 percent to 2 percent for 2010.

For the fourth quarter, the Irving, Texas-based company earned $5.4 million, or 24 cents a share, compared with $2.4 million, or 10 cents a share, a year earlier.

Revenue rose 7 percent to $187.6 million.

Analysts were expecting earnings of 25 cents a share on revenue of $185.9 million for the fourth quarter.

Total operating costs rose 6 percent to $176.2 million.

Shares of CEC closed at $35.16 Thursday on the New York Stock Exchange. (Reporting by Renju Jose in Bangalore; Editing by Ratul Ray Chaudhuri)

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