Bob Evans Profit Down, No Spin-Off Or Sale Of BEF Foods; Shares Plunge

(RTTNews) - Bob Evans Farms Inc. (BOBE) on Tuesday reported a drop in a profit for the third quarter, despite growth in revenues, with both earnings and revenues falling short of expectations. Moving head, the restaurant chain lowered its fiscal year 2015 outlook.

Shares of Bob Evans Farms plunged over 18 percent after its Board announced it will not sell or spin off its BEF Foods segment.

Bob Evans said after a thorough review with investment bank Lazard, it reached a conclusion that a sale or spin-off of BEF Foods business at this time would not enhance shareholder value. Meanwhile, the company has retained JP Morgan to work with the Finance Committee to review potential for real estate transactions or other changes to its capital structure.

Columbus, Ohio-based Bob Evans' third-quarter profit dropped to $5.9 million or $0.25 per share from $6.2 million or $0.24 per share a year ago.

Excluding items, adjusted earnings rose to $14.3 million or $0.60 per share from $8.2 million or $0.31 per share last year. On average, analysts polled by Thomson Reuters expected earnings of $0.70 per share for the quarter. Analysts' estimates typically exclude special items.

Bob Evans' sales for the third quarter rose to $357.2 million from $340.2 million a year ago. Analysts had a consensus revenue estimate of $359.33 million for the third quarter.

Sales at Bob Evans Restaurants segment rose 4.1 percent to $250.4 million, while BEF Foods' sales increased 7.2 percent to $106.8 million.

Looking forward to the fiscal year 2015, the company now sees adjusted earnings of $1.40 to $1.60 per share and sales of $1.34 billion to $1.36 billion. Analysts currently expect earnings of $1.97 per share on revenue of $1.36 billion for 2015.

Earlier, the company expected adjusted earnings of $1.90 to $2.10 per share on sales of $1.35 billion to $1.37 billion. The company lowered its outlook to reflect the under-performance of its restaurant business in the third quarter.

BOBE closed Tuesday's trading at $59.64, up $0.16 or 0.27%, on the Nasdaq. The stock, however, slipped $10.70 or 17.94%, in the after-hours trade.