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Burger King boosts profit 21 percent

/ Source: The Associated Press

Burger King Holdings Inc. said Thursday that strong same-store sales and new restaurant growth helped boost profit 21 percent in its third fiscal quarter, as new products, U.S. advertising and international expansion all helped the No. 2 burger chain.

The Miami-based fast-food chain said net income rose to $41 million, or 30 cents per share, from $34 million, or 25 cents per share, last year. Revenue rose 10 percent to $594 million from $539 million last year.

Analysts, on average, predicted a profit of 27 cents per share on revenue of $580 million, according to Thomson Financial.

Burger King says same-store sales rose 5.8 percent during the quarter.

“This quarter we delivered on our global growth strategies, with all segments contributing to top and bottom line expansion,” said John Chidsey, chief executive officer. “We leveraged our product pipeline and marketing initiatives around the world while creating a consistent and positive guest experience at our restaurants.”

In a statement, Chidsey credited the growth to a new Whopper advertising campaign in the U.S. as well as new chicken sandwiches and Snoopy and SpongeBob SquarePants promotions. In the rest of the world new products and standardizing some menus also helped.

For the first nine months of the fiscal year, net income was $139 million, or $1.01 a share, compared with $112 million, or 82 cents a share last year. Revenues were $1.81 billion compared with $1.64 billion in the same period a year earlier.

Burger King now expects a profit of $1.33 to $1.35 per share for the year, up from previous guidance of $1.28 per share. Analysts predict earnings of $1.32 per share.

In the quarter, Burger King continued its global expansion including the opening of the first restaurant in Colombia and three franchised airport locations in China.

“Our high visibility restaurant in the Beijing airport will expose millions of passengers to our brand this summer in connection with the 2008 Olympics,” Chidsey said. “Gateway airport locations throughout the Asia Pacific region are projecting our brand presence worldwide.”

In a conference call, Chidsey also noted that Burger King now has the most restaurants in the chain’s history, rising 254 over last year to a total of 11,455. By comparison, McDonald’s Corp., the largest burger chain, has about 30,000 restaurants and Wendy’s International Inc. has about 6,600, according to their Web sites.