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DineEquity 2Q profit rises, IHOP strengthens

GLENDALE, Calif. (AP) -- DineEquity said Tuesday that its second-quarter net income climbed 4 percent, buoyed by a strong performance from IHOP and lower expenses.

DineEquity Inc., which also owns Applebee's, earned $16.6 million, or 87 cents per share, for the three months ended June 30. That's up from $15.9 million, or 88 cents per share, a year ago.

The drop in earnings per share is due to more shares outstanding in the recent quarter.

Taking out impairment and closure charges and other items, earnings were $1.02 per share.

Analysts surveyed by FactSet expected earnings of 94 cents per share.

Combined expenses for franchises and restaurants, rentals and financing plunged 49 percent to $67.1 million. General and administrative expenses dropped 4 percent to $35.6 million.

Revenue for the Glendale, Calif., company fell 31 percent to $158.1 million from $229.4 million last year. In 2012, DineEquity sold off a large number of its Applebee's restaurants and transformed them into a franchised system. The results beat the $156.6 million in revenue Wall Street predicted.

Revenue at IHOP locations open at least a year rose 1.9 percent as customer traffic increased. The company said that this was the first quarter that IHOP has reported a rise in traffic and revenue at locations open at least a year since 2010's fourth quarter. IHOP also reported customers spending more per check, on average.

Revenue at Applebee's locations open at least a year climbed 1.3 percent, thanks to a higher average spending per check. Traffic fell slightly.

Revenue locations open at least a year is a key gauge of a restaurant operator's health, because it excludes results from locations recently opened or closed.

DineEquity shares closed Monday at $65.38, down 2 percent since the start of the year. The stock has traded between $44.73 and $78.39 in the past 52 weeks.