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Earnings roundup: Burger King profits soar

Wed., Jan. 31, 2007

Burger King Holdings Inc., the world’s second-largest burger chain, kept its revitalization going Tuesday with a second-quarter profit gain of 41 percent on strong same-store sales and income from new restaurants.

The Miami-based chain reiterated its double-digit profit growth forecast for fiscal 2007 as it works to improve its brand through expansion and marketing of new food menus.

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.

“Higher costs contributed to a 5 percent drop in Kellogg Co.’s fourth-quarter net income, the breakfast food and snack maker reported Tuesday.

The company behind Frosted Flakes, Eggo waffles and Keebler cookies said increased fuel, energy, commodity and benefit costs weighed on its results.

Shares of Kellogg fell 60 cents, or 1.18 percent, to close at $50.21 on the New York Stock Exchange. They have traded in a 52-week range of $42.41 to $51.

UPS Inc., the world’s largest shipping carrier, said Tuesday its fourth-quarter profit increased 7.5 percent on a 5.6 percent gain in sales.

The results, announced before the market opened, were in line with Wall Street expectations. But shares of UPS fell 95 cents, or 1.3 percent, to close at $72.70 on the New York Stock Exchange.

The Atlanta-based company said that for the three months ending Dec. 31 it earned $1.13 billion, or $1.04 a share, compared to a profit of $1.05 billion, or 95 cents a share, for the same period a year ago.

US Airways Group Inc., which is pushing to buy rival Delta Air Lines Inc. in a hostile takeover bid, on Tuesday said it swung to a profit in the fourth quarter, as strength in both mainline and express operations helped offset high fuel costs.

The company said it posted a profit of $12 million, or 13 cents per share, in the fourth quarter, compared to a loss of $261 million, or $3.27 per share during the same period in 2005.

The results included special items, such as an outstanding fuel hedge contracts, expenses from its September 2005 combination with America West Airlines, and a debt conversion payment, that totaled $74 million.

Excluding special items, the company said it posted a profit in the quarter of $86 million, or 91 cents per share.

“Higher metal prices and robust sales in Europe helped United States Steel Corp. more than double its fourth-quarter profit, but the steel maker warned of a downturn in coming months.

The sharp increase, which surpassed Wall Street projections, also reflected year-ago results that were undermined by anemic prices and production volumes, as well as costs tied to the rebuilding of the company’s main blast furnace in Gary, Ind.

The Pittsburgh-based company said fourth-quarter earnings soared to $297 million, or $2.50 per share, compared with $109 million, or 85 cents per share, during the same period a year earlier.

Analysts polled by Thomson Financial were looking for earnings of $2.21 per share on revenue of $3.73 billion.

“Shares of drug makers Wyeth and Merck & Co. took a hit Tuesday after disappointing earnings reports, but for different reasons: Wyeth missed analysts’ expectations by a wide margin, while Merck’s profit plunged due to ongoing legal and restructuring costs.

Merck surprised some analysts by boosting its reserve for litigation over withdrawn painkiller Vioxx for a second straight quarter.

That charge and others cut Merck’s fourth-quarter profit by 58 percent despite higher revenues.

Wyeth shares fell $1.24, or 2.5 percent, to $49.36, also on the New York Stock Exchange, as the Madison, N.J.-based company boosted quarterly profit by 17 percent but came in a nickel below analysts’ consensus of 71 cents in earnings per share.

Whitehouse Station, N.J.-based Merck, the maker of Fosamax for osteoporosis and Singulair for asthma and allergies, reported net income of $473.9 million, or 22 cents per share, down from $1.12 billion, or 51 cents per share, in 2005’s last quarter.


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