DineEquity Inc, parent of the IHOP and Applebee's restaurants, posted a higher-than-expected quarterly profit, helped by lower borrowing costs and falling food prices.

Revenue missed analysts' estimates, but the company said it was confident it would meet its full year same-store sales targets as the two chains benefit from new marketing and menu changes. DineEquity also reassured investors about its ability to pay down debt.

With both Applebee's and IHOP, we are not simply focused on surviving the current economy, but are positioning both brands for sustained leadership over the long term, Chief Executive Officer Julia Stewart said in a statement.

Net income available to common shareholders was $7.9 million, or 46 cents per share, compared with a year-earlier loss of $16.4 million, or 98 cents per share.

Excluding impairment charges and other items, earnings were 55 cents a share. Analysts on average expected 30 cents, according to Thomson Reuters I/B/E/S.

Revenue at the Glendale, California-based company fell about 14.7 percent to $333.6 million, missing the analysts' average forecast of $337.2 million.

Domestic systemwide same-store sales fell 1.1 percent at IHOP and dropped 6.5 percent at Applebee's.

DineEquity benefited from lower overhead expenses as it has sold 110 company-operated Applebee's restaurants over the past year and integrated back-end operations for both chains. General and administrative costs fell by about 14.1 percent in the quarter.

The company said it hoped to generate enough cash flow to meet obligations under its debt covenants so it would not be forced to sell more Applebee's that it owns at a disadvantage.

DineEquity raised its 2009 outlook of cash flow from operating activities to a range of $130 to $140 million. It had previously forecast $115 million to $125 million.

Last week, Chili's Grill & Bar parent Brinker International Inc reported quarterly profit and revenue that beat analysts' estimates, but said its three-course meals promotion cut into margins as it trained staff to serve them.

DineEquity said it now expected Applebee's 2009 domestic systemwide same-store sales to be at the lower end of its previous forecast of a decline of 2 percent to 5 percent. But the company said it still saw IHOP's performance ranging from a rise of 1 percent and a fall of 1 percent.

Shares of DineEquity were up 1 percent at $21.83 in morning trading.

(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn and Maureen Bavdek)

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