Burger King profit beats Street

(Reuters) - Burger King Holdings BKC.N reported a higher quarterly profit on Wednesday as a lower tax rate and cost controls helped the world's No. 2 hamburger chain offset the impact of March weakness at company-operated restaurants.

The company, however, trimmed its outlook for fiscal 2009 citing "ongoing market challenges and unknown potential effects of the swine flu situation."

Miami-based Burger King, best known for its Whopper hamburgers, said net income rose to $47 million, or 34 cents per share, in the third quarter that ended on March 31, from $41 million, or 30 cents per share, a year earlier.

Burger King had previously said it saw earnings of 33 cents to 35 cents per share for the quarter and analysts polled by Reuters Estimates, on average, had expected the company to earn 33 cents per share.

"While we performed well in January and February, the unexpected decline in March traffic across many of the countries in which we operate, particularly the Germany and Mexico markets, adversely affected our results," Burger King Chief Executive John Chidsey said in a statement.

Revenue at the chain, which offers a variety of burgers, chicken sandwiches, salads, and breakfast items, rose 1 percent to $600 million.

Burger King reduced general and administrative costs by 11 percent in the latest third quarter.

Worldwide, sales at stores open at least one year rose 1 percent. In North America, same-store sales rose 1.6 percent.

Worldwide company restaurant margins for the quarter were 11.7 percent, down from 13.2 percent in the prior-year period.

Burger King blamed customer traffic declines in March, higher labor costs in Germany and increases in food, paper and product costs worldwide for the fall in restaurant margins.

For fiscal 2009, Burger King expects adjusted earnings to be in the range of $1.39 a share to $1.42 a share, down from its prior outlook of $1.44 a share to $1.49 a share. The forecast includes an estimated hit of 10 cents from movements in currency exchange rates.

(Reporting by Dhanya Skariachan in Bangalore; Editing by Lisa Von Ahn, Dave Zimmerman)