(RTTNews) - Papa John's International Inc. (PZZA: News ), one of the largest take-out and delivery pizza restaurant chains in the U.S., Tuesday reported higher profit for the third quarter, beating the Wall Street expectations, and raised its full-year 2009 earnings forecast.

Louisville, Kentucky- based Papa John posted third-quarter net income of $11.7 million or $0.42 per share, compared with $7.7 million or $0.28 per share in the prior year period.

The recent quarter results include a gain related to a franchisee-owned cheese purchasing company BIBP, while last year included charge associated with impairment and disposition losses, together with gains from the consolidation of BIBP and finalization of certain income tax issues.

Excluding these one-time items, net income for the quarter was $8.5 million or $0.30 per share, compared to $7.9 million or $0.28 per share in the preceding year period.

On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.26 per share. Analysts' estimates typically exclude special items.

Revenues for the period declined 5.7% to $263.9 million from $280.0 million in the comparable period last year, missing the Wall Street expectations of $270.80 million.

Domestic restaurant sales declined $8.6 million, reflecting the sale of 62 restaurants during the fourth quarter of 2008, and domestic commissary sales fell $15.2 million on cheese prices. However, franchised restaurants sales increased $8.3 million due to addition of two franchise entities to the company's portfolio.
Domestic system-wide comparable sales for the third quarter remained flat, comprising a 0.6% decrease at company-owned restaurants and a 0.2% increase at franchised restaurants.

International restaurants and commissary sales increased to $7.65 million from $7 million last year, partially offsetting the revenue decline.

Restaurant operating margin on an external basis increased to 20.7% from 16.8% year-ago. Excluding the impact of BIBP consolidation, operating margins rose to 19.7% from 16.2%.

Total costs and expenses declined to $244.27 million from $266.52 million, led by $11.93 million decline in domestic company-owned restaurant expenses and a $15.09 million fall in total domestic commissary and other expenses over the prior-year quarter. The company's operating income was higher at $19.67 million, compared with $13.51 million last year.

For the nine-month period, the company reported net income of $43.76 million or $1.57 per share, compared with $24.02 million or $0.84 per share in the prior-year. Excluding items, the company earned $30.47 million or $1.09 per share, down from $34.19 million or $1.20 per share. Year-to-date, revenues fell to $825.56 million from $852.44 million last year.

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