Brinker International, Inc.

Brinker International, Inc. (EAT - Snapshot Report) has recently begun to rebound after taking a hit in the last year as the company pairs its capital spending and secures a new $215 million revolving line of credit.

Company Description

Brinker International, Inc. owns and franchises a chain of restaurant brands primarily in the United States. Some of the company's restaurants include Chili's Bar and Grill, On The Border Mexican Grill and Cantina and Maggiano's Little Italy. The company has over 1,900 restaurants under management and has a market cap of $1.39 billion.

Brinker's share price has taken a hit in the recessionary environment of the last year as consumers have pulled back and cut spending. But the company's second-quarter results, reported on Jan 22, demonstrate that it is turning the corner and making the necessary adjustments to regain its footing.

Second-Quarter Results

For the quarter, revenue was down 8% from last year, but still ahead of estimates at $ $949.4 million. Brinker noted that its sales were effected by the closure of 47 restaurants and the sale of198 restaurants in the pas 12 months.

When removing one-time items, earnings came in at 27 cents per share, 9 cents ahead of the consensus estimate.

Consistent Earnings

In spite of the choppy economic environment, Brinker has produced consistent earnings over the last year, having surprised and beat the consensus estimate in each of the last four quarters by an average of 5 cents, or 27%.

Spending Curbed

On March 11, Brinker announced that it was cutting its 2009 capital expenditures in order to preserve cash and adapt a more cautious approach in a tumultuous market. Brinker will open just 13 company-owned restaurants this year, down from 70 last year, with no opening scheduled for 2010. Total capital expenditures will decrease to $115 million from $270.4 million last year.

Estimates On The Rise

In light of the respectable quarter and recent capital adjustments, analysts have been raising their earnings targets for the company, with the current-year estimate up 3 cents in the last 30 days to $1.11 per share. The next-year estimate stands at $1.20, a 7% earnings growth projection.

The Chart

As previously mentioned, shares of EAT have been rallying for the last 4 months, bottoming out just below $4 in late November and recently surging just below $15. Take a look at the chart below.

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