Brinker International fourth-quarter net income rises 50 percent on lower costs, flat revenue

Brinker International 4Q net income up 50 percent

DALLAS — Brinker International Inc., which owns the Chili’s restaurant chain, said Thursday its fiscal fourth-quarter net income rose 50 percent as costs fell and it booked a gain on the sale of its On The Border Mexican Grill & Cantina unit.

The company earned $63.6 million, or 62 cents per share, up from year-ago net income of $42.1 million, or 41 cents per share. Excluding discontinued operations and one-time items, Brinker’s profit amounted to 44 cents per share for the three months ended June 30. The company said better beef and chicken prices helped offset costs of promotional discounts and menu changes at Chili’s.

Revenue rose less than 1 percent to $743.1 million, helped in part by an additional operating week.

The results missed expectations of analysts surveyed by Thomson Reuters, who expected the restaurateur to earn 46 cents per share on revenue of $762.4 million. Those estimates typically exclude one-time items.

The company completed the sale of On The Border to an affiliate of Golden Gate Capital during the quarter, for gross proceeds of about $180 million. It booked a gain of about $16.5 million to latest-quarter results.

Revenue at restaurants open at least a year — a key industry metric — fell 3.4 percent in the quarter. The measure is key because it looks at growth excluding new restaurants. For the full year, the figure fell 4.2 percent, with Chili’s 4.6 percent drop worse than the 1.2 percent drop at Brinker’s Maggiano’s Little Italy chain.

For fiscal 2010, the company earned $137.7 million, or $1.34 a share, up from $79.2 million, or 77 cents per share, in the prior year. Income from continuing operations totaled $1.18 per share.

The company expects that figure to rise between 10 and 20 percent next year, with earnings per share expected to range from $1.30 to $1.42, in line with analyst estimates of $1.38. The company expects revenue at restaurants open at least a year to be flat or fall as much as 2 percent, however.

The company owns, operates, or franchises more than 1,500 locations.

Brinker shares rose 68 cents, or 4.6 percent, to $15.57 in midday trading on heavy volume.