Investors relish Burger King’s 82% profit rise

MIAMI —  Burger King Holdings Inc., the world’s second-largest burger chain, said Wednesday that its fiscal first-quarter profit jumped 82%, driven by sales of Value Menu items and the Stacker sandwich and new restaurant openings. The company’s shares rose $1.12, or 6.7%, to $17.90.

For the quarter ended Sept. 30, Burger King profit totaled $40 million, or 30 cents a share, up from $22 million, or 19 cents, a year earlier. Excluding costs related to management fees, franchise system distress and the tax effects of unusual items, net income was 26 cents a share in the latest period.

The Miami-based company’s revenue rose 8% to $546 million.

Analysts polled by Thomson Financial expected a profit of 26 cents a share on revenue of $538.1 million.

Sales at stores open at least a year, a widely used industry gauge of performance, grew 2.6% in North America and 2.4% worldwide. North America sales were driven by its new bacon cheeseburger called the BK Stacker, BK Value Menu items and growth in its breakfast business. Premium products drove sales in Latin America and Europe.

Chief Executive John W. Chidsey said the earnings results “speak to the resurgence of the Burger King brand and its underlying reach to consumers.”

For its full 2007 fiscal year, the company expects revenue growth between 6% and 7% and adjusted earnings growth between 10% and 12%.

Burger King, which went public in May, also reported $50 million in retired debt using cash it generated from operations and said it aimed to continue to reduce debt.

The fast-food chain said it had retired $435 million in debt, a 30% reduction in total debt since its initial public offering.

The company’s efforts at expansion in the last 12 months also were mentioned as a reason for the strong earnings, with 101 new restaurant openings in Europe, the Middle East and Asia’s Pacific region, and 90 new restaurant openings in Latin America in the last 12 months.

There are more than 11,100 Burger King restaurants worldwide, second to McDonald’s Corp.