Tim Hortons to raise dividend, buy back stock; growth slows in fourth quarter

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OAKVILLE, Ont. - Tim Hortons Inc. (TSX:THI) says its fourth-quarter revenue growth was held back as it passed along lower commodity prices to restaurant owners and its profit took a $9-million hit from restructuring charges.

Total revenue for Tim Hortons for the three months ended Dec. 31 was up 4.1 per cent at $811.6 million, with the final three months of the year producing less than half the growth rate as the year as a whole.

Net income attributable to shareholders also fell, dropping 2.5 per cent from a year earlier to $100.3 million or 65 cents per share.

The company said the profit was five cents per share lower than it would have been without $9 million of reorganization expenses recorded in the quarter.

Adjusted operating income,, which excludes the reorganization costs, was $157.4 million, up 4.4 per cent from $150.8 million a year earlier.

For the full year, Tim Hortons net income was up 5.2 per cent to $402.9 million or $2.59 per share — below the company's 2012 guidance.

"Our 2012 earnings outlook communicated in February 2012 of $2.65 to $2.75 per share did not contemplate the 10 cents per share corporate reorganization charge taken during the fiscal year," the company said.

The company said it planned to increase its quarterly dividend by 23.8 per cent. Starting with the March payout, the quarterly dividend will rise to 26 cents per share.

The Canadian restaurant company also announced it will buy back up to $250 million of its shares, a move that tends to push up per share earnings over time.

Organizations: Tim Hortons Inc., TSX

Geographic location: OAKVILLE

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