Burger King profit rises, focuses on overseas

(AP) NEW YORK - Burger King Worldwide Inc.'s (BKW) net income surged 60 percent in the second quarter as the fast food chain reworked its menu and focused on expanding overseas.

As the fast-food market becomes increasingly crowded at home in the U.S., Burger King has concentrated on growing abroad. In the past year, 80 percent of new store openings have been in Europe, the Middle East and Africa.

During the second quarter it worked out joint ventures with Russia and China. The Russian joint venture will see several hundred restaurants open there over the next few years, while the China deal will bring 1,000 restaurants to the country over the next five to seven years. Burger King says it is the biggest multi-unit development agreement in its history.

Back in the U.S., Burger King has been working to refresh its outdated image and win back lost market share. The company launched its biggest menu expansion ever in April, with items including fruit smoothies, specialty salads and coffee frappes.

Burger King Worldwide Inc., which began trading publicly again in June, reported net income of $48.2 million, or 14 cents per share, in the quarter ended June 30. That's up from $30.2 million in the year-ago period, when the company was privately held.

Removing stock-based compensation expense and other items, earnings were 17 cents per share.

CEO Bernardo Hees said Wednesday in a statement that the company's efforts to revamp its menu and remodel restaurants in the U.S. and Canada are showing tangible results.

Revenue dropped 9 percent to $540.8 million from $595.4 million. But Burger King said that revenue at locations open at least a year - a key gauge of a retailer's health - climbed 4.4 percent.

Locations in Latin America and the Caribbean reported a 10.5 percent jump in the figure, led by Brazil and Mexico. In the U.S. and Canada, the metric climbed 4.4 percent thanks to the addition of menu items like wraps and frappes. The Asia Pacific region and Europe, the Middle East and Africa also posted increases in revenue at locations open at least a year.

Burger King last traded as a public company between 2006 and 2010 before it was purchased and taken private by investment firm 3G Capital.

The company's return to the NYSE wasn't through an initial public offering. Instead, 3G Capital announced an unusual deal in April to sell a minority stake to Justice Holdings Ltd., a London-based shell that was specifically set up to invest in another company. 3G Capital received $1.4 billion in exchange and retains a 71 percent stake in the company.

That stake was worth about $3.6 billion based on Burger King's opening share price, meaning that, on paper, 3G Capital has more than earned back the $3.26 billion it paid for Burger King in 2010.

Burger King has more than 12,600 restaurants worldwide, compared with 33,000 for McDonald's Corp.