Boston Market’s Meteoric Rise May Be Burning Out

Boston Chicken Inc.’s stock has dropped more than 50 percent this year, and that has its detractors crowing.

Ever since Boston Chicken went public in one of the hottest new stock sales of 1993, skeptics have said that the restaurant company was a flawed concept propped up with hundreds of millions of dollars in cheap money raised on Wall Street.

Now the money is drying up and the skeptics claim victory. Sales at the company’s Boston Market restaurants are falling and the company earlier this month fired a quarter of its headquarters staff to trim costs and conserve the $175 million left from an April bond sale. Meanwhile, investors await word from the company next week on whether it sharply cuts its expansion plans, hurting earnings growth.

“What it all boils down to is, does this restaurant concept work?” said Steven Toomey, an analyst with George K. Baum & Co.

The Golden, Colorado, company earlier this year said it would open about 310 stores. It is expected to announce a scaled-back expansion plan in a conference call with analysts and investors Wednesday. If it trims the plan below 260 stores, Toomey said, Boston Chicken will miss Wall Street’s earnings forecasts.

Others think Boston Chicken soon will be talking about closing stores, not opening them. Franchisees who own the bulk of the chain’s stores have piled up more than $550 million in losses over the past three years, according to Boston Chicken’s financial statements.

“My guess is 25 percent of the system closes in the next two or three years,” said Roger Lipton with Lipton Financial Services, who’s urged investors to avoid Boston Chicken since 1993.

Some stocks that moved substantially or traded heavily Friday:

NYSE

Philip Morris fell 2 to 45-1/2.

Loews fell 3-1/4 to 103-3/8 .

RJR Nabisco Holdings fell 1-3/8 to 34-1/2 Tobacco negotiators pushed today to the verge of a multibillion-dollar settlement that would impose unprecedented restrictions on cigarettes and spell the demise of Joe Camel and the Marlboro Man. Negotiators set an afternoon news conference at a Washington hotel.

Hewlett-Packard Co. rose 1-1/8 to 55.

The computer maker and the State Science and Technology Commission of China signed a renewable, two-year agreement to establish a joint research center in the Haidian District in China.

Wheelabrator Technologies Inc. rose 2-5/8 to 15-5/8.

Waste Management Inc. fell 1-1/8 to 32-5/8.

Waste Management’s board approved a $15-a-share cash offer to acquire the 23 percent of Wheelabrator that it doesn’t already own. The offering price was 15 percent above Wheelabrator’s closing stock price of $13 Thursday. Waste Management provides waste management services.

Wheelabrator makes waste treatment systems. Waste Management transports and disposes of waste for municipal and commercial clients.

NASDAQ

RF Monolithics rose 3 to 22.

The Dallas-based company’s stock rose for the second straight day on its strong third-quarter earnings report. RF Monolithics makes radio frequency components for the computer, automotive and telecommunications industries. It attributed its higher earnings to increased revenues from several product lines.

AMEX

Cablevision rose 4-1/8 to 53-1/8

Rupert Murdoch and cable’s TeleCommunications Inc. are in talks to buy a stake in Cablevision Systems’ sports properties to create a new, national sports network.The negotiations are fairly close to resolution and a deal could come as early as Monday, a source close to the deal, speaking on condition of anonymity, told The Associated Press.