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Luby's: Will Fourth Quarter Earnings Take Us To The Promise Land?

LUB is set to release its 4th Q earnings on Wed, nov 7th after the close of market. Estimates are meek at 5 cents on sales of $112 million. That compares to 2 cents in earnings last year, on $113.5 million in revenues. I expect that management was purposely light on the guidance (sort of a under promise, over deliver moment) so current guidance should be easily surpassed. I expect LUB to actually earn 8 cents on revenues of $116 million and those results should be enough to put this very thinly traded stock into orbit ( about a 10% jump). The rally will be exacerbated by a serious short squeeze. Unfortunately, Capstone Investment discontinued research coverage, so the only analyst on the conference call might be James Fronda with Sidotti,who currently has a buy rating in place. I am hoping the company announces some sort of stock buyback to reward some very patient shareholders.

Disclosure: I am long LUB.

Additional disclosure: I plan on buying more shares in extended hours trading, after the earnings release, if expectations are indeed surpassed.