BANGALORE - Burger King Holdings reported a higher quarterly profit as a lower tax rate and cost controls helped offset March weakness at its company-operated restaurants.

Shares of the world's No. 2 hamburger chain rose more than 4 percent on the results. The news also boosted shares of peers McDonald's Corp (MCD.N) and Yum Brands Inc (YUM.N).

Burger King, however, trimmed its fiscal 2009 outlook, citing market challenges and potential effects of the swine flu situation.

The Miami-based company, best known for its Whopper hamburgers, said net income rose to $47 million, or 34 cents per share, in the third quarter that ended on March 31, from $41 million, or 30 cents per share, a year earlier.

Burger King had previously said it saw earnings of 33 cents to 35 cents per share for the quarter. Analysts on average had expected 33 cents, according to Reuters Estimates.

The Miami-based company, which reduced general and administrative costs by 11 percent in the latest quarter, said currency exchange rate fluctuations hurt earnings by 3 cents a share.

Revenue at the chain, which offers a variety of burgers, chicken sandwiches, salads and breakfast items, rose 1 percent to $600 million.

While we performed well in January and February, the unexpected decline in March traffic across many of the countries in which we operate, particularly the Germany and Mexico markets, adversely affected our results, Burger King Chief Executive John Chidsey said in a statement.

The company said it had taken steps to woo customers in those two markets.

In Mexico, Burger King is focusing on its Come Como Rey, or Eat Like a King value menu and has begun a national coupon campaign with laundry detergent brand VIVA to refresh demand.

Burger King, which has nearly 12,000 restaurants worldwide, has been sprucing up older eateries, rolling out premium sandwiches, extending hours and adding value-menu items like the Cheesy Bacon BK Wrapper sandwich to catch up with rivals.

Fast-food chains such as McDonald's and Yum's Taco Bell have aggressively pushed value menus that feature food items at or around $1 to draw in customers amid the sharp economic downturn.

Worldwide, sales at Burger King's restaurants open at least one year rose 1 percent. In North America, same-store sales rose 1.6 percent.

Worldwide company restaurant margins for the quarter were 11.7 percent, down from 13.2 percent a year earlier.

Burger King blamed customer traffic declines in March, higher labor costs in Germany and increases in food, paper and product costs worldwide for the fall in restaurant margins.

For fiscal 2009, Burger King expects earnings of $1.39 to $1.42 a share, excluding items, down from its prior outlook of $1.44 to $1.49. The forecast includes an estimated hit of 10 cents from movements in currency exchange rates.

Burger King shares rose 4.1 percent to $17.81 in early New York Stock Exchange trade, while Dow component McDonald's Corp's (MCD.N) was up 0.7 percent at $54.90. Yum, whose other chains include Pizza Hut and KFC chains, was up 0.5 percent at $33.97. (Reporting by Dhanya Skariachan in Bangalore; Editing by Lisa Von Ahn, Dave Zimmerman)

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