By Blaise Robinson
TORONTO (Reuters) - Tim Hortons Inc.'s fourth-quarter profit more than tripled, helped by hearty sales of a new breakfast sandwich, restaurant growth and a writedown in its year-earlier results, the coffee and doughnut chain said on Wednesday.
Tim Hortons, spun off last year by U.S.-based fast-food chain Wendy's International , earned C$68 million ($58 million), or 35 Canadian cents a share, in the quarter ended December 31.
That's well up from a profit of C$16 million, or 10 Canadian cents a share, a year earlier, when earnings were eroded by a write-down in goodwill and asset impairment.
Analysts had predicted an average profit of 34 Canadian cents before exceptional items, according to Reuters Estimates.
"Stronger than forecast revenue and cost containment (drove) better than expected results," RBC Dominion Securities analyst Irene Nattel wrote in a research note.
"Management defied investor skepticism over their ability to open 80-100 units in the fourth-quarter and opened 111, of which 31 were in the U.S.," wrote the analyst, who had expected the company to earn 33 Canadian cents a share.
During the quarter, Tim Hortons opened 111 restaurants, up from 93 in the same period a year earlier. It now has more than 3,000 outlets, mostly in Canada.
Revenue for the quarter grew 16 percent to C$467 million.
Sales at stores open for at least a year -- a key measure of a retailer's health -- swelled 9.3 percent in Canada and 8.3 percent in the United States, plumped considerably by the introduction of a new breakfast sandwich.
"Our breakfast sandwiches have been well received by customers both in Canada and the United States and we continue to see that it is getting strong demand within our restaurants," Chief Executive Officer Paul House told analysts during a conference call.
House, who has been named chairman of the company to replace James Pickett, didn't provide a breakdown of same-store sales figures which would give analysts an idea of the impact of the new sandwich.
Launched last April in the United States and six months later in Canada, Tim's new breakfast offerings compete head to head with McDonald's Corp.'s Egg McMuffins.
The company, which forecast 10-percent growth in operating income in 2007, said it expects to open between 120 to 140 restaurants in Canada this year, and between 60 to 80 restaurants in the United States.
Shares of Tim Hortons rose 22 Canadian cents, or 0.6 percent, to C$37.27 in afternoon trading on the Toronto Stock Exchange. The stock has climbed about 37 percent since its initial public offering last March.
($1=$1.18 Canadian)
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