Burger King 2Q profit rises

Burger King Holdings Inc., the world's second-largest burger chain, said Tuesday its fiscal second-quarter profit jumped 41 percent on solid same-store sales and income from new restaurants, as the company continues to revitalize its brand through aggressive marketing and expansion.

Net income rose to $38 million, or 28 cents per share, for the three months ended Dec. 31 compared with $27 million, or 24 cents per share, a year ago. Revenue climbed 9 percent to $559 million from $512 million.

Analysts polled by Thomson Financial had forecast earnings of 26 cents per share on sales of $544.7 million.

Same-store sales, or sales at restaurants open at least a year, rose 3.7 percent worldwide and 4.4 percent in North America. It was the chain's 12th consecutive quarter of worldwide positive comparable sales.

Burger King's stock has risen about 23 percent since the company went public May 18 at a price of $17 a share.

Its shares rose 23 cents to $20.98 in morning trading Tuesday on the New York Stock Exchange.

During the quarter, the company retired $50 million in debt, and it has retired a total of $125 million in debt in the past seven months.

Growth drivers during the quarter included the company's BK Value Menu and its Xbox video game collection giveaway, in addition to a strong marketing campaign that includes creative television advertising.

The chain also announced its first quarterly dividend as a public company. The dividend payment of 6.25 cents per share will be paid on March 15 to shareholders.

For the first six months of the fiscal year, Burger King reported a profit of $78 million, or 57 cents a share, up from $49 million, or 43 cents per share, a year earlier. Annual revenue rose to $1.11 billion from $1.02 billion.

The company did not give specific guidance for entire fiscal year, but analysts expected earnings of $1.05 per share on sales of $2.2 billion.

Burger King said it was on target to achieve its financial goals for the fiscal year, which include increasing adjusted net income in excess of 20 percent and continuing to reduce debt.

The chain said it expects more success with its breakfast value menu that is set to debut in February, with 10 items priced beginning at $1 that include French toast sticks and a new Hamlette sandwich, made with ham, cheese and egg.

Burger King also is beginning an expansion into Asia, with restaurants opening in Indonesia beginning in June. The chain also plans to open a new restaurant in Japan this year.

In the past year, Burger King opened 85 new restaurants in Europe, the Middle East and in the Asia, and 90 new restaurants in Latin America. In 2006, Burger King opened 43 new restaurants net of closures and bought 49 franchise locations. It is second to McDonald's Corp. on the burger business.