Chuck E. Pleases

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Hey, kids! Let's play a game we like to call Beat Expectations. It's a lot like Whack-a-Mole, only you have to swing your padded hammer at things that pop up like rising cheese prices and a tenuous economy. Chuck E. Cheese parent CEC Entertainment (NYSE: CEC) knows the game well. It's got the high score!

Last night, CEC posted another kid-friendly quarter. Earnings grew by 24% to $0.82 a share, while revenues clocked in at $206.9 million. That's smartly ahead of the $0.77 a share the company had projected it would earn just two months ago.

That's especially impressive when one considers that the company's core cheese costs soared by 36% -- and that transforming itself into Chuck E. Cheeseless was out of the question.

Thankfully, CEC isn't saddled with the rising fuel costs that plague pizza delivery rivals Papa John's (Nasdaq: PZZA) and Yum! Brands' (NYSE: YUM) Pizza Hut. It also doesn't hurt that those token-swallowing arcade games sit there draining patrons' pockets. Sticking to its goal of growing profits by at least 20% this year, the company is looking to earn between $2.09 and $2.12 a share in 2004.

That poses another interesting arcade game concept. The stock trades at just 15 times this year's projected bottom line. Investors who take to these shares like a Pac Man to shiny blue meanies may end up the big winners.

Have you ever been inside a Chuck E. Cheese? Is it playful or sensory overload? Where can you take a young child that needs to unwind? Can a trip to Chuck E. Cheese be considered educational? All this and more -- in the Parents and Expecting Parents discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz went to a Chuck E. Cheese with his kids just twice last year. He's a Skee-ball demon, though. Don't go messing with him! He does not own shares in any of the companies mentioned in this story.