Reaction to Darden Restaurants' busy day

|About: Darden Restaurants, Inc. (DRI)|By:, SA News Editor

Shares of Darden Restaurants (DRI) are putting in a volatile premarket session as investors digest lackluster same-restaurant sales, weak guidance, and the planned separation of Red Lobster from the mother ship.

The quick analyst reaction to the move by the company to shed Red Lobster in order to "enhance" shareholder value leans to the skeptical side: 1) The action comes late and could only draw mild P-E interest. 2) The new DRI will be 60% Olive Garden - a chain which still needs a lot of work to be done on it to reverse momentum. The question is how? Capex spending is being cut with management tied to a healthy dividend payout.