Salomon Cuts Jack in the Box to 'Underperform'
Salomon Smith Barney downgraded Jack in the Box (JBX ) to underperform from in-line.
The burger chain cut its first quarter earnings per share forecast to 55 cents to 63 cents, and lowered the fiscal 2003 estimate to $2.01 to $2.04. Analyst Mark Kalinowski attributes the weaker-than-expected earnings per share to continued heavy competition in the fast-food sector and economic pressures on the fast-food user.
Kalinowski thinks the news is negative for other fast-food companies in his universe. He doesn't expect an immediate turnaround in sales; in fact, he says he thinks sales seem to be getting worse vs. his previous expectation for a rebound in metric sales. Kalinowski cut his $2.40 fiscal 2003 (Sept.) earnings per share estimate to $2.00, and cut the $2.73 fiscal 2004 estimate to $2.30.