BY Momei Qu:

Contributor, Stock Traders Daily

Real Time Trading Reports:  Included are detailed trading reports designed to help investors realize opportunities in these companies as earnings are released.  The reports are linked to the stock symbols in the article below. Performance - Click Here

(La Jolla, CA) This week in earnings preview we take a look at three companies in the restaurant business. This is expected to be a favorable quarter for the industry as the economy is improving and consumers are once again open to the idea of buying a $4 cup of coffee or eating out on a week night. Let’s see what the analysts think about Starbucks, Wendy’s, and California Pizza Kitchen, all scheduled to report Thursday.

Starbucks (Nasdaq: SBUX) closed at $19.42 Tuesday, continuing the recovery from its 52 week low of $7.06. A large part of Starbucks’ rebound comes from its aggressive cost saving initiative. The company has cut operating expenses by $370 million since the beginning of the year, with $180 million more expected this quarter. Store traffic has also picked up relative to earlier this year as customers started to purchase higher end espresso again. Both factors are expected to drive Starbucks to profit – analysts are estimating 4Q earnings per share of $0.21 on revenues of $2.4 billion. To find out whether this is the right time to invest in SBUX, download our free SBUX trading report.

Moving from coffee to fast foods, Wendy’s / Arby’s (NYSE: WEN) is estimated to report 3Q earnings per share of $0.06 on revenues of $917 million. Although sales for both Wendy’s and Arby’s have been flat this quarter (high traffic for July but slow in September), margins are expected to be healthy due to labor control and lower food costs. Food prices are expected to remain low for the near future, which is good news for WEN and the restaurant industry as a whole. WEN closed at $4.00 Tuesday, with $2.81 and $5.80 anchoring its 52 week range. Our free WEN trading report can provide more insight on the upsides and risks of investing in Wendy’s / Arby’s.

California Pizza Kitchen, or CPK (Nasdaq: CPKI), is also benefiting from lower food costs this quarter. Coupled with its own cost cutting initiatives, CPK is expected to report higher margins. Sales are still slow however, as consumers are only starting to become generous with their spending again and are more likely to make minor purchases such as beverages or fast food items than sit down for a moderately priced entrée. One area that CPK is experiencing solid revenues is its frozen pizza and flat bread melts products being sold through Kraft at participating grocery stores. The newest store to come onboard is Whole Foods, which brought the products onboard at the end of September. CPK is estimated to 4Q report earnings per share of $0.24 on revenues of $167 million. CPK closed at $13.50 Tuesday, up from its 52 week low of $5.24 but has plenty of room to grow before reaching its 52 week high of $17.44. Can CPK realize its value amidst this economy? Our free CPKI trading report can provide more insight.