Wendy’s falls short of forecast
Wendy’s is trying to reinvent itself as a purveyor of relatively higher-quality fast food. The problem is that its competitors are aggressively promoting cheap eats and stealing away price-conscious customers.
The Dublin, Ohio, company, which is known for its square hamburger patties and Frosty shakes, on Wednesday reported a first-quarter profit that met Wall Street expectations. But sales fell short of Wall Street’s hopes. The company noted that it lost market share in the value category, which accounts for about 20 percent of the fast-food industry.
Revenue rose 2 percent to $603.7 million versus a year ago but fell short of the $615 million forecast of analysts polled by FactSet.
Delta will pay out dividend
Delta Air Lines will start paying a quarterly dividend and buy back some of its shares — investor-friendly moves common in other industries but rare for airlines.
For years, the industry repelled long-term investors with high debt, losses, labor strife, bankruptcies and roller-coaster stock prices. Now, airline bosses are eager to show that those days are over and their companies are good investments.
Delta said Wednesday that the dividend and stock buyback will return $1 billion to shareholders. The airline has posted a profit for three consecutive years, while trimming its debt by $5 billion.
Dow holds on to 15,000 level
The Dow Jones industrial average rose, closing above 15,000 for a second day after breaching the landmark level for the first time Tuesday.
On Wednesday, a day without any major economic releases, investors focused on company earnings as reporting for the first quarter draws to a close. Although earnings growth has slowed from last quarter, profits are at record levels and projected to rise throughout the year.
Internet company AOL plunged as its subscription revenue fell, and hamburger chain Wendy’s slumped after it reported revenue that fell short of Wall Street’s expectations.
On the positive side, high-end grocer Whole Foods and the video game publisher Electronic Arts rose sharply after predicting full-year profits that were higher than analysts were expecting.