Darden Restaurants slips on cautious profit view

NEW YORK — Shares of Darden Restaurants Inc. slid Wednesday after the owner of the Olive Garden and Red Lobster chains cautioned its fiscal 2010 earnings will likely be within the lower half of its predicted range.

Late Tuesday Darden said sales trends indicate 2010 profit will be within the lower half of its $2.59 to $2.85 per share forecast.

Analysts surveyed by Thomson Reuters forecast net income of $2.78 per share for the year. Their estimates normally exclude one-time items.

The Orlando, Fla.-based company also reported an adjusted profit of 67 cents per share, which beat the 66 cents-per-share estimate of analysts surveyed. But sales dipped 2 percent to $1.73 billion to miss Wall Street's $1.78 billion estimate.

Sara Senatore of Bernstein Research said in a client note that sales results from the company's restaurants, which include The Capital Grille, Bahama Breeze's, LongHorn Steakhouse, Olive Garden and Red Lobster, did not meet her expectations but said the earnings indicated better-than-expected restaurant margin.

Senatore reaffirmed an "Outperform" rating and $46 price target.

Shares of Darden Restaurants fell $3.38, or 9.4 percent, to $32.77 in midday trading. Over the past year, the stock has traded in a range of $13.21 to $41.21.