Burger King profit rises

A man bites into his Whopper burger as he eats lunch at the newly-opened Burger King in the town August 9.

CHICAGO (Reuters) - Burger King Holdings BKC.N reported higher quarterly profit, helped by lower costs for food and paper, but sales suffered as consumers ate out less in order to save money.

The world's No. 2 hamburger chain after McDonald's Corp (MCD.N), expects softer sales at existing restaurants in the first half, with improvement in the second half if consumer sentiment improves.

But the company declined to forecast earnings for the current fiscal year citing uncertain consumer spending.

Burger King has been sprucing up older eateries, introducing premium sandwiches, extending hours and adding value-menu items like the Cheesy Bacon BK Wrapper sandwich to catch up with rivals.

The seller of the Whopper Hamburger said on Tuesday that net income was $58.9 million, or 43 cents per share, in the fourth quarter ended on June 30, compared with $50.6 million, or 37 cents per share, a year earlier.

Earnings were boosted by 7 cents a share as the dissolution

of some foreign entities helped lower the company's tax rate.

Analysts on average forecast earnings of 33 cents a share, according to Reuters Estimates.

Revenue fell 2.4 percent to $629.9 million.

Worldwide, sales at Burger King's restaurants open at least one year fell 2.4 percent.

Fast-food chains generally have outperformed rivals during the current economic downturn, but those chains are not created equal.

Earlier this month, McDonald's reported second-quarter profit that matched Wall Street's view.

McDonald's June sales at established U.S. restaurants disappointed investors, but the hamburger chain's shares rose after it reported that global July same-store sales were helped by improvements in Britain, France and the United States.

Burger King shares traded at $18.60 on Tuesday in premarket electronic trading, up from Monday's new York Stock Exchange close of $17.66.

(Reporting by Brad Dorfman and Lisa Baertlein; Editing by Derek Caney)