The Wendy's Co (NASDAQ:WEN) showed its earnings numbers for the three months through September 2013 this morning before the market opened on Wall Street. The company reported that it broke even in the period, beating the estimations of analysts. On this morning's market the company's stock dropped by more than 8%.
In the run-up to the release of this morning's report, analysts were expecting a loss from the company. By consensus the company was expected to lose about 2 cents per share. Excluding some costs the company actually managed to earn 8 cents per share, though it broke even on a GAAP basis.
The Wendy's Co. earnings
The Wendy's Co (NASDAQ:WEN) dropped a lot of value on this morning's market as a result of the company's guidance for the fourth quarter of the year. The company is now looking for full year earnings of 25 cents per share. The firm said that sales should fall by around 10% in the fourth quarter.
Wendy's missed analyst estimated for sales in this morning's report, and that miss was likely a contributor to the massive loss in value the firm suffered this morning. Analysts were expecting the company to bring in revenue of $642 million, but the company only brought in $640.8 million.
The Wendy's Co. performance
Shares in The Wendy's Co (NASDAQ:WEN) have risen dramatically through 2013. The firm's shares had increased by more than 65%. Today's massive loss in value is likely a result of the massive expectations placed on the company, rather than the firm's actual earnings numbers.
The Wendy's Co (NASDAQ:WEN) is currently trading at more than 250 times 2012 earnings. That prices a huge amount of growth into a company that is trying to restructure itself. Wendy's is expected to grow by a large magnitude in the coming months. As Tesla investors will attest, those kinds of expectations can harm the value of a company very quickly.