Can the Arby's merger save Wendy's?

The home of the square burger has been struggling since founder Dave Thomas died in 2002. Now the owner of a rival chain is betting that he can bring back the sizzle.

The latest in a series of disappointing earnings reports from Wendy's International (WEN, news, msgs) was overshadowed last week by the news that Triarc (TRY, news, msgs), parent of rival fast-food franchiser Arby's, was buying the struggling hamburger joint in an all-stock deal worth $2.3 billion.

It marks the end of a nearly 2½-year campaign by Nelson Peltz, who owns 10% of Wendy's through his ownership of Trian Partners, to force a turnaround at the hamburger chain.

The deal news pushed Wendy's shares up 4.2% on April 24, the day the deal was announced, and they've climbed an additional 9% in the days since.

Wendy's earnings report only reinforced the image of an underperforming brand. First-quarter earnings from continuing operations were $8.4 million, or 10 cents per share, well below the First Call consensus estimate of 17 cents and year-ago results of $15.1 million and 16 cents, respectively.

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