Cheesecake profit falls 9.7% but beats estimates

Restaurant chain operator Cheesecake Factory Inc. reported a 9.7% drop in fourth-quarter earnings but beat Wall Street estimates because of a lower-than-expected tax rate.

The company’s stock fell 4.5% after the announcement. One analyst said if not for the drop in taxes, results would have fallen short of analysts’ average estimate.

Net income was $20.4 million, or 26 cents a share, compared with $22.6 million, or 28 cents, a year earlier.

Wall Street analysts, on average, had been expecting earnings of 24 cents a share, according to Reuters Estimates.

Factoring out the unexpectedly low tax rate, however, the company earned 22 cents a share, Merriman Curhan Ford analyst Eric Wold said.

“The only reason for the upside was the lower tax rate,” Wold said. “The business is still pretty weak.”

The company’s income tax provision was $31.9 million for the quarter, compared with $46.3 million last year.

Last month, Cheesecake Factory reported an 18% rise in quarterly revenue that beat both Wall Street’s and the restaurant operator’s own expectations.

Revenue was $360.7 million, up from $328.6 million last year. The company originally forecast sales of $351 million to $354 million.

Shares of Calabasas Hills-based Cheesecake Factory traded at $26.36 after hours. The stock closed earlier at $27.76, up 7 cents.