CHICAGO Morton’s Restaurant Group Inc. reported this week worse-than-expected fourth-quarter results and a reduced 2008 profit outlook, but it appeased investors with plans for a $6 million stock repurchase plan.
The company’s shares climbed more than 10 percent on Friday also on one analyst prediction that the company could be a buyout target.
For the quarter ended Dec. 30, net income rose 14.5 percent from a year ago to $6.4 million, or 38 cents per share. Revenues increased 10.6 percent to $100.5 million, aided by five new locations opened last year. Morton's currently operates 78 upscale namesake steakhouses and four Bertolini’s Italian restaurants.
At least one analyst labeled the results as “frustrating” since most of the profit gain was attributed to an income tax benefit and reduced general and administrative expenses from a year ago rather than improved restaurant sales and margins. Systemwide same-store sales dropped 0.7 percent in the fourth quarter.
For the full year, Morton’s booked a profit of $13 million, or 77 cents per share, compared with a year-earlier loss of $13.6 million, or 84 cents per share, when the company had one-time charges and expenses from debt repayment and a terminated management agreement with prior leadership. Fiscal 2007 revenues increased 10 percent to $353.8 million.
For the current year, Morton’s said it had “limited ability to provide guidance” because of the “uncertainty of the U.S. economy.” It predicted a same-store sales drop of between 2 percent and 3 percent in the current first quarter. Morton’s also authorized the repurchase of an additional $6 million of the company’s shares, bringing its total buyback plan to $10 million.