Wendy's International Inc., which recently put itself up for sale, reported a quarterly profit on Thursday as it worked on improving its image with new products and advertising.
Shares of Wendy's, which did not provide an update on its sale plans in its statement, fell as much as 3.2 percent in morning trading before paring some of those losses.
Second-quarter earnings at the world's third-biggest hamburger chain were $29.2 million, or 33 cents per share, compared with a year-earlier loss of $29.1 million, or 25 cents per share.
Wall Street analysts on average had expected a profit of 33 cents per share, according to Reuters Estimates.
Last year's results included a big charge for the company's evaluation of its Baja Fresh chain, which it later sold. Income from continuing operations rose to $29.3 million, or 33 cents per share, from $9.3 million, or 8 cents per share.
Revenue slipped 0.2 percent to $632.9 million.
Price increases are hurting Wendy's short-term performance but should lead to profit expansion over the long term, Chief Executive and President Kerrii Anderson said in a statement.
Wendy's launched its That's Right ad campaign, which touts the company's use of fresh beef, during the quarter. Consumers have responded positively to the campaign, Chief Marketing Officer Ian Rowden said in a statement.
Wendy's earlier this month said sales at company-owned restaurants open at least 15 months had risen 0.7 percent in the second quarter.
The company slashed its full-year earnings forecast last month due to lower-than-expected same-store sales and increased commodity costs.
Wendy's on Thursday stood by that outlook, which calls for earnings of $1.09 to $1.23 per share. Analysts on average expect a profit of $1.12 this year.
Wendy's in June suspended its earnings forecast for 2008 and 2009 while it conducts its strategic review.
The Dublin, Ohio-based company also said it plans to offer its new breakfast menu in more than 650 restaurants by the end of August.
Its board also approved a regular quarterly dividend of 12.5 cents per share.
Shares of Wendy's were down 67 cents, or 1.9 percent, at $34.45 after falling to $34.00 in morning trading on the New York Stock Exchange. The shares trade at nearly 24.6 times next year's expected earnings while McDonald's Corp., the world's largest hamburger chain, trades at about 17 times its expected profit for next year, according to Reuters data.