Industry News | July 11, 2000

Sonic Looks Promising, Analysts Say

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Sonic Drive-In has fallen back into good graces with investors. As CNBC's prestigious "Pick of the Week," the company is expected to perform very well in the coming months. Financial analysts have noticed that Sonic is not your average quick-serve—and with good reason.

The Sonic experience is somewhat enamoring for all ages—both young and old are delighted by the service as well as the old-fashioned menu. Customers have the option of remaining in their vehicles or sitting at an outdoor table, but either way a carhop will bring their food directly to them, in about as much time as they would wait in line at a counter or drive-thru. That kind of service is rare in fast food, although some other chains are beginning to experiment with tableside service.

Grappling with the extensive menuboard is an anticipated challenge for most Sonic fans, although many have very specific items in mind when they arrive. A Cherry Limeaid, for instance, on a hot day; or maybe tater tots, a grilled cheese sandwich, or pork fritters.

According to CNBC, Sonic's 1999 fiscal profit rose to $1.41 from $1.12 in 1998. Earnings are on the upswing, and net income has surged 24 percent to $12.7 million in the first half of 2000. Analysts look for Sonic to see $1.73 a share, based on a survey conducted by First Call Corp. Five out of the eight analysts following Sonic rate it a "buy", and the other three have bestowed a rating of "strong buy."

Sonic's 3rd QTR earnings report will be released this Thursday evening after the market closes. A listen-only simulcast can be accessed at the company's web site. The simulcast will begin at approximately 9:00 a.m. Central Daylight Time, Friday, 6-23. A replay of the call will be available beginning at approximately Noon, Central Daylight Time and continuing for about 30 days.