Wend y''s International Inc. on Wednesday reported a preliminary loss of $135.7 milli on for the fourth quarter, attributed mainly to writing down the value of its st ruggling Baja Fresh Mexican restaurant subsidiary. The results fell short of Wal l Street projections, and Wendys shares fell.
The Columbus fast-food chain said the earnings will be revised to reflect a p ossible further loss after it changes how rental leases are recorded. The compan y expects a pretax expense of $6 to $9.5 million, or 3 to 5 cents per share, aft er the accounting change.
In its preliminary results, Wendys reported a loss of $1.20 per share for the quarter that ended Jan. 2, compared with earnings of $64.7 million, or 56 cents per share, a year ago. Sales rose 13 percent to $972.7 million from $862.4 mill ion.
Wendys said in November that it expected to report a loss for the fourth quar ter as it reduces the value of the Baja Fresh Mexican Grill chain and said it wo uld close 20 of the restaurants.
It also took a charge for the quarter while it appeals a $5.1 million verdict in a lawsuit that accused it of interfering in the sale of some Florida restaur ants. Excluding charges, the company made 44 cents per share for the quarter. An alysts surveyed by Thomson First Call expected earnings of 45 cents a share.
For the year, Wendys made $57.8 million, or 50 cents per share, down more tha n 75 percent from 2003, when the company made about $236 million, or $2.05 per s hare. Revenues increased 15 percent to $3.6 billion from $3.1 billion. Wendys st ock fell 50 cents at $40.33 midday Wednesday on the New York Stock Exchange. The stocks traded from a low of $31.74 to a high of $42.75 in the past year.