It’s a Whopper: Burger King profit jumps in fourth quarter

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BY MEGAN MOLLMANN -MEDILL NEWS SERVICE

Burger King Holdings Inc.’s [[BKC]] profits rose 16.4 percent in its fourth quarter and beat the analysts’ consensus expectation, helping send the company’s shares up sharply on Tuesday.

Net income in the quarter ended June 30 rose to $58.9 million, or 43 cents per diluted share, compared with $50.6 million, or 37 cents per diluted share, for the same period in 2008. Analysts polled by Zacks Investment Research estimated a profit of 33 cents per share.

The company did not offer earnings guidance for fiscal 2010 due to “continuing consumer uncertainties.”

“We anticipate that the challenging consumer environment will continue due to high unemployment levels, which has resulted in a significant reduction in out-of-home eating expenditures,” said John Chidsey, Burger King’s chief executive officer and executive chairman.

The nation’s second-largest hamburger chain was aided by improving restaurant margins in the U.S. and Canada and by a lower year-over-year tax rate of 21.6 percent in the quarter compared with 26.7 percent in the year earlier period.

Total revenue dropped 2 percent in the fourth quarter to $629.9 million from $645.7 million in the fourth quarter a year ago.

The company gave a general forecast of 15 percent annual growth in earnings per share, but said it will slow expansion of new restaurants to 250 to 300 in fiscal 2010 compared with the 360 that were opened in fiscal 2009, with 80 to 90 percent of the new restaurants slated for outside the U.S. and Canada.

The tax rate is also estimated to jump to 36 percent in fiscal year 2010, company executives said.

Click here to read the full earnings report release.