Darden Restaurants' Stock Jumps After Earnings Beat, Dividend Hike

By Tomi KilgoreMarketWatch Pulse

Darden Restaurants Inc.'s stock surged 2.8% in light premarket trade Friday, after the restaurant operator reported a better-than-expected fiscal second-quarter profit, raised its earnings outlook, lifted its dividend 14% and set a new $500 million stock buyback program. For the quarter ended Nov. 29, earnings came to $43.2 million, or 33 cents a share, after a loss of $32.8 million, or 26 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to 54 cents, beating the FactSet consensus of 52 cents. Sales rose 3.2% to $1.61 billion, just shy of the FactSet consensus of $1.62 billion, as sales rose 1.2% at Olive Garden and 5.6% at LongHorn Steakhouse. The company raised its fiscal 2016 EPS outlook to $3.25 to $3.35 from $3.15 to $3.30. The new quarterly dividend of of 50 cents a share, up from 43.75 cents, will be payable Feb. 1 to shareholders of record on Jan. 8. The stock has climbed 11% year to date through Thursday, while the S&P 500 has slipped 0.8%.

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