Denny's shares fall after 3Q results

CHICAGO (AP) — Shares of Denny's Corp. sank Friday, a day after the restaurant chain posted worst-than-expected sales.

Shares of the eatery fell 46 cents, or 17.3 percent, to $2.20 in Friday trading.

On Thursday, Denny's said its quarterly profit dropped 6 percent to $10 million, or 10 cents per share. Revenue for the third quarter fell 23 percent to $146.1 million.

Analysts surveyed by Thomson Reuters expected Denny's, which is based in Spartanburg, S.C., to earn 7 cents per share on revenue of $152.7 million.

Denny's also told investors that it expected a steeper decline for 2009 sales at company-run restaurants open at least a year.

Still, CL King analyst Michael W. Gallo told investors in a research note that the company's results show that despite the tough economy, it's still performing well.

"We believe Denny's is in the early stages of a significant transition but that it is being masked by the current challenging casual dining environment," he wrote, maintaining his "Strong Buy" rating on the stock.