Aug. 26--Despite a decline in customer traffic and spending, Burger King said Wednesday it saw a 16 percent increase in fourth-quarter profits.

The Miami fast-food chain reported net income for the quarter ending June 30 of $58.9 million or 43 cents per share. During the same period last year, the company earned $50.6 million or 37 cents per share. But fourth quarter revenue dropped to $629.9 million, compared to $645.7 million last year.

Analysts on average had expected Burger King to earn 33 cents per share on revenue of $632 million. But Burger King's fourth-quarter earnings also included an eight-cent benefit from a lower tax rate and four-cent benefit from sale of restaurants.

"Overall, we view this as a pretty solid result, particularly relative to low expectations going in," Deutsche Bank analyst Jason West told investors in a research note.

Burger King's stock rose $1.09 per share Wednesday to close at $18.75.

But the company said it expects difficult times ahead as unemployment has forced many of its "super fan" customers to cut back on the frequency of visits or how much they spend when they do come.

Burger King declined to provide analysts with any guidance for 2010 earnings. The chain said it expects "soft" sales during the first half of the year with some improvement in the second half if consumer sentiment improves. The U.S., Germany and Mexico are expected to face particularly difficult times.

Chief Executive John Chidsey told analysts that "as fast as things change from good or bad" the company didn't feel it could offer guidance because of the uncertainty surrounding comparable store sales.

"The ultimate driver of our business is comp sales," Chidsey said. "Do we believe comps will end up down 2 percent, flat or up 2 percent for the year? Who knows?"

Burger King's worldwide comparable store sales declined 2.4 percent for the quarter. The drop was even worse in the U.S. and Canada, which reported a 4.5 percent decline.

For the year Burger King saw worldwide comparable sales increases of 1.2 percent and 0.4 percent for North America.

This is the first quarter Burger King's comparable sales have declined since before the company went public in 2006.

Chidsey said the U.S. traffic declines hit bottom in May. "The traffic in the U.S. has gotten sequentially better for each of the last three or four months," Chidsey said on the call. "The comps are still negative. The trends are improving, but they're not where we need them to be. Where we want them to be is positive."

Burger King has seen improvement in the U.S. by focusing on value-oriented promotions like two for $3.50 Whopper sandwiches, $1 Whopper Jr sandwiches and some markets that have introduced $1 double cheeseburgers.

Burger King President of Global Marketing Russ Klein said these promotions have not eaten into profits as much as anticipated.

"The discounting has been offset by the price increases we have taken in the past," Klein said. "As long as they continue to work, we're going to keep running it."

Although rival McDonald's has seen revenue decline, its same store sales rose 4.8 percent globally and 3.5 percent in the U.S. during the most recent quarter.

JP Morgan analyst John Ivankoe told investors in a note Wednesday that he believes McDonald's and Yum Brands, the owner of KFC, Pizza Hut and Taco Bell, remain better investments.

The other firms offer a "combination of higher non-U.S. exposure that has been performing better, more visible international unit growth driven by China, and lower operating leverage," he wrote.

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