CKE Beats Profit Expectations in Quarter

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CKE Restaurants Inc. on Wednesday said its fourth quarter net income surged more than 2,600 percent despite a small dip in revenue, as the fast food restaurant operator offset rising operating costs with a reduction in interest expenses.

After the markets closed, the Carpinteria parent of the Carl’s Jr. and Hardee’s chains reported net income of $2.6 million (5 cents per share) for the quarter ended Jan. 26, compared with net income of $98,000, or break-even per share, a year ago.

Revenue fell 3 percent to $327 million, although company-operated restaurants increased same-store sales 1.7 percent. CKE has sold many of its Hardee’s locations to franchisees in the past year.

Analysts surveyed by Thomson Reuters on average expected the company to report earnings of 3 cents per share on revenue of nearly $337 million.

For the full 2008 fiscal year, CKE’s net income rose 19 percent to $37.0 million (69 cents) as revenue fell 3 percent to $1.5 billion. The company recorded $9 million in interest expense resulting from mark-to-market adjustments related to its interest rate swap agreements, compared with $11.4 million in the prior year.

This was an “extremely challenging year for our economy, including record commodity costs, the collapse of the credit markets and a significant decline in consumer spending in the latter half of the year,” said Chief Executive Andrew F. Puzder in a statement. “We believe both of our brands remained well-positioned to attract those consumers looking for premium quality products as they trade down from more expensive dining options.”

CKE shares, which closed up 12 cents, or 1.4 percent, to $8.72 on the New York Stock Exchange jumped 12 percent in after-hours trading.

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