UPDATE 1-Wendy's new menu helps beat profit estimates

Wed Jan 16, 2013 8:18am EST

* Fourth-quarter adj earnings $0.08/share vs est $0.04

* Fourth-quarter revenue $629.9 mln vs est $637.8 mln

* Reaffirms FY13 adj earnings outlook $0.18-$0.20/share vs est $0.17

* Shares up 5 pct premarket

Jan 16 (Reuters) - Wendy's Co, the second-largest U.S. hamburger chain, reported a fourth-quarter profit that beat Wall Street estimates, helped by new menu items and spruced-up restaurants.

The company's shares, which closed at $4.90 on the Nasdaq on Tuesday, were up 5 percent in premarket trading on Wednesday.

The company reiterated its 2013 adjusted earnings forecast of 18 cents to 20 cents per share. Analysts on average were expecting earnings of 17 cents per share, according to Thomson Reuters I/B/E/S.

Wendy's and Burger King Worldwide have gained market share by emulating larger rival McDonald's Corp, which boosted sales by rolling out new menu items such as lattes and fruit smoothies, renovating its restaurants and extending restaurant opening hours.

Wendy's, known for its thick Frosty milkshakes and square hamburger patties, recently tweaked its value offerings - replacing its 99-cent menu with a 99-cent to $1.99 "Right Price Right Size Menu".

McDonald's and Burger King have already expanded their value menus in similar ways.

U.S. diners have become increasingly picky about where they spend their money amid a lackluster economic recovery. Sales at established company-operated restaurants in North America fell 0.2 percent during the quarter.

Net income from continuing operations rose to $22.4 million, or 6 cents per share, in the fourth quarter from $3.98 million, or 1 cent per share, a year earlier.

Excluding items, Wendy's earned 8 cents per share.

Analysts on average were expecting earnings of 4 cents per share on revenue of $637.8 million.

Revenue rose 2 percent to $629.9 million.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.