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Burger King profit up; considers dividend
2006-11-01
Burger King Holdings Inc. (NYSE:BKC), the world's second-largest hamburger chain, on Wednesday reported higher quarterly profit, helped by improved sales and margins and a lower corporate tax rate. The company, which went public in May, said it was considering other uses for its excess cash, including dividends or share repurchases. Net income for the fiscal first quarter, ended September 30, rose to $40 million, or 30 cents per share, from $22 million, or 19 cents per share, a year earlier. Excluding $13 million in early debt retirement costs and other one-time items, last year's first-quarter earnings were $35 million, or 26 cents per share. Wall Street analysts, on average, had been expecting earnings of 26 cents per share in the latest period, according to Reuters Estimates. Burger King said sales of its BK Stacker sandwich exceeded expectations, and its "value menu" items added to both revenue and profit. The company's effective tax rate decreased by more than 10 percentage points to about 37 percent, which also boosted earnings. Total quarterly revenues rose 7 percent to $546 million. Worldwide comparable-store sales were up 2.4 percent. Burger King went public after being owned by private equity firms Texas Pacific Group, Bain Capital and a Goldman Sachs Group Inc. (NYSE:GS) affiliate since 2002. Its shares trade at about 14 times analysts' profit forecasts for the next year, compared with 16.4 times for larger rival McDonald's Corp. (NYSE:MCD).
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