UPDATE 3-Brinker raises dividend, full-year outlook

* Raises quarterly dividend 27 pct to 14 cents a share

* To buy back additional $250 million in common shares

* Shares slightly higher (Recasts; adds analyst comment, details on selling On the Border, changes dateline from NEW YORK; updates share move)

LOS ANGELES, March 26 (Reuters) - Chili's Grill & Bar parent Brinker International Inc (EAT.N) boosted its quarterly dividend by 27 percent and raised its fiscal 2010 earnings forecast as improving consumer sentiment translates into more visits to full-service eateries.

Brinker's top rival, Olive Garden and Red Lobster parent Darden Restaurants Inc (DRI.N), raised its full-year profit outlook earlier this week as diners splurge a bit more on meals at full-service restaurants than they did a year ago, when traffic was very weak. [ID:nN23110777]

Brinker now expects earnings of $1.40 to $1.44 a share, excluding one-time items, for the fiscal year ending in June, up from a previous forecast of $1.15 to $1.30. Analysts on average were expecting $1.39, with estimates ranging from $1.26 to $1.50, according to Thomson Reuters I/B/E/S.

Brinker shares were up 4 cents to $20.31 in late-morning trade on the New York Stock Exchange.

U.S. consumers prepared more meals at home during the recession, which put millions out of work and torpedoed home values and investments. While there are signs the worst of the financial crisis is over, high unemployment continues to weigh on the restaurant sector.

Casual dining chains and other restaurants continue to offer promotions and special offers to woo consumers. Those efforts are made possible by low food costs, but can eat away at profits if not done properly.

Brinker, which also owns Maggiano's Little Italy restaurants, forecast third-quarter earnings of 41 cents to 44 cents per share before one-time items. Analysts' average forecast is 40 cents a share.

The company -- which plans to double earnings per share by 2015 through international growth and improving operations at U.S. Chili's outlets -- said it was raising its quarterly dividend to 14 cents a share from 11 cents.

It plans to use a 40 percent dividend payout ratio as a guideline.

Brinker also announced plans to buy back an additional $250 million of common shares, bringing the total available stock repurchase authorization to $310 million.

The company said late on Thursday that it would sell its On the Border Mexican Grill & Cantina brand to an affiliate of Golden Gate Capital, which bought Romano's Macaroni Grill from Brinker in 2008. Brinker plans to buy back shares with funds from the sale as well as with excess free cash flow over time. [ID:nWNAB3850]

On the Border's 153 restaurants represented roughly 10 percent of the company's units, Bernstein analyst Sara Senatore said in a client note.

With the sale, Brinker's business will be even more dependent on Chili's, which operates in a crowded and highly competitive playing field that includes operators like DineEquity Inc's (DIN.N) Applebee's. (Reporting by Lisa Baertein and Dhanya Skariachan; Editing by Steve Orlofsky, Lisa Von Ahn and John Wallace)