Burger King Holdings, Inc. (NYSE: BKC), which competes with Yum! Brands (NYSE: YUM), Wendy's/Arby's Group (NYSE: WEN), and, of course, McDonald's Corporation (NYSE: MCD), reported earnings today for the first fiscal quarter. The statistics show that, well, it kind of is good to be the king. I won't say these are the biggest growth numbers I've ever seen, but I thought they showed that the fast-food entity is doing well serving its core customers.

Revenues jumped 12%. On a global basis, comps jumped 3.6%, which management points out is the 19th time in a row that global comps were in positive-growth territory. I know, that's the kind of managerial cheerleading that an investor must be careful about, but I think it's a cool fact in this case. Domestically, comps advanced 3%, and, well, it's the 18th time in a row for that metric, if you care. Adjusted net income came in at $0.38 per share, a 9% increase. This is where the creepy Burger King mascot sheds a tear, because that was one penny below the expectations of the analyst wizards who populate the kingdom of Wall Street (according to Melly Alazraki's Before the Bell article from earlier today).

Although Burger King didn't please the analyst community, I thought this was a good quarter. The release said that the company purchased some stock and paid a dividend, all of which was covered by cash generated from operations. Management seems to be amply aware of the stresses that the economy is going to put on its patrons and is studying pricing strategies. That's the problem for every purveyor of foodstuffs. People aren't so keen about paying up for stuff these days, so how do you get them to do it? Costs and currency fluctuations are affecting many companies, and they won't have an easy go of it as the recession continues its march of pain (even with the recent upward moves in the stock market, I'm not that bullish just yet). So, even though I like Burger King's Q1, and even though I think it's a great marketer of its menu items (the youth really dig that creepy Burger King character), I'll concede that the stock could be volatile in the coming months. Long-term, though, it should be a good investment.

Disclosure: I don't own any company mentioned; positions can change at any time.

As the founders of the Zagat Survey, Tim and Nina Zagat's financial futures are pretty directly tied to the future of the restaurant industry.

Bias aside, they make a pretty compelling case for bullishness on the restaurant industry in an op-ed piece in today's Wall Street Journal. A recent Zagat survey found that one-third of Americans are eating out less, 28% say they are visiting less-expensive places, and 20% are cutting back on alcohol, appetizers and dessert.

But in the long term, the Zagats are bullish: Americans like eating out, cooking at home has gone the way of the hula hoop, and we're busier than ever. A few bad quarters aside, the long-term outlook is what matters and the future for restaurants still looks good. Better still, economic weakness has slowed restaurant expansion and resulted in more than a few closing, which bodes well for the surviving players.

But for now, the share prices of most restaurant stocks have been absolutely pulverized, making them an interesting long-term contrarian investment possibility. Earlier this month, I wrote about some beaten-down restaurant stocks that might be a good buy.

Perhaps it is too obvious to spend much time on, but sales of premium coffee are not going very well at McDonald's (NYSE: MCD). A recession will do that. According to The Wall Street Journal, "The weak economy has prompted some consumers to brew coffee at home instead of buying it at coffee shops."

McDonald's will be just fine. In its most recent earnings report, same-store sales were up an impressive amount in every region of the world. If its new coffee plans fail, why should anyone care? At $53, its shares have done better than most.

The less obvious message to be taken from the McDonald's trouble is that Starbucks (NASDAQ: SBUX) is likely to have its worse quarter ever and its stock is about to get hammered into the ground. Unlike McDonald's, expensive coffee and food is all its sells. Trading under $10, Starbucks is near a 52-week low, down from a period high to $26.75.

Wall Street expects Q3 EPS at Starbucks to come at 14 cents. Don't believe it. The figure is likely to be much worse than that and the company's shares could trade down to $6.

Douglas A. McIntyre is an editor at 24//7 Wall St.

With the economy in the toilet, a lot of people are reluctant to go and spend big on restaurant cuisine.

By itself that would be a good reason not to invest in restaurant companies. But restaurant stocks have been absolutely smoked of late, so you have to wonder how much of the bad news is already priced in. Take a look:

• DineEquity (NYSE: DIN), parent company of IHOP and Applbee's: closed on Friday at $11.13, 83% off its 52-week high.
• The Cheesecake Factory (NASDAQ: CAKE): closed Friday at $10.96, 56% off its 52-week high.
• CKE Restaurants (NYSE: CKR), parent company of Carl Jr.'s and Hardee's: closed Friday at $8.88, 47% off its 52-week high.
• Starbucks (NASDAQ: SBUX): closed Friday at $11.08, 59% off its 52-week high.

With very few exceptions, restaurant stocks have been pulvarized of late. It's true that the bad times may last awhile longer but in the grand scheme of things, a few quarters -- or even a few years -- of poor sales and earnings have very little bearing on the creation of long-term shareholder value. That is if a company is well-capitalized and has little leverage.

I think bargain hunters who buy and hold restaurant stocks trading at low price/earnings ratios with very little debt and strong brands will do quite well here.

One stock to avoid: DineEquity, which trashed its balance sheet with the Applebee's acquisition and may have to head back to the market to raise cash at the expense of current shareholders. The Wall Street Journal reports (subscription required) on unprecedented promotions and store closings for some leading chains.

With closings and consolidation, well-managed companies with good balance sheets should come out of this mess OK, and investors who get in at depressed prices should prosper.

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about BK below in the comments.

Is there any advertising icon more creepy than the Burger King (NYSE: BKC) King? I get nightmares myself every time the mascot appears on the small screen. My opinion, though, may be in a minority since the character seems to be wildly popular.

Unlike McDonald's (NYSE: MCD), Burger King isn't afraid to be edgy and even annoying. I always have to turn the volume down on my TV whenever a BK spot is on the air or my ears will start to bleed otherwise. Burger King tried being like McDonald's and got its butt kicked. I am old enough to remember when the king was a cuddly cartoon. That strategy has now shifted and all of the in-your-face marketing appears to be paying off.

Shares of the number two burger chain are up 17% over the past year as cash-strapped consumers forgo casual dining chains for fast food. Wall Street analysts consider the stock a buy. The company is expected to post earnings of 34 cents per share on revenue of $633.26 million when it reports results Aug. 21, according to Thomson Reuters. Those are respectable numbers especially given the current economic environment.

All is not completely calm in Whopper land. Franchisees are balking at new late-night hours, and the Miami company, like every food business, is being slammed by high commodities prices. But at the end of the day, Mel Brooks had it right in History of the World Part I: "It's good to be the king."

Europe is not exactly a growth market for most US companies. The economy there is slowing much as it is in America. But, McDonald's (NYSE: MCD) may be an exception. According to Bloomberg, "McDonald's Corp., the world's largest restaurant company, may report a second-quarter profit after European sales rose twice as fast as in the U.S."

The news is unusually good because rising commodities prices are likely to squeeze the fast food company's margins. The costs of bread and meat have been up sharply over the last year.

Europe seems an unlikely savior for McDonald's numbers. It is often viewed as a region where good food and traditional cuisine are part of the culture. Who wants a hamburger from a fast food place when the local restaurant has crepe suzette?

But fast food, filled with fat and salt, is irresistible. McDonald's has proved that in every country where it does business.

Douglas A. McIntyre is an editor at 247wallst.com.

McDonald's (NYSE: MCD) program to sell premium coffee is not going well. That would make some sense. Even Starbucks (NASDAQ: SBUX), the kings of expensive Java, is doing poorly.

According to The Wall Street Journal, "Management may have to defend its giant bet on lattes and cappuccinos, which they want to add at all McDonald's 14,000 U.S. restaurants by next year." The newspaper says that early sales figures for the new drinks are mediocre.

If McDonald's did pull back on its sales of high end coffee-based drinks, it would be the best news Starbucks has had in a couple of years. As US same-store sales growth rates at the chain have fallen, the company's stock has moved from over $40 to below $15. Getting some competition out of the market could be critical to Starbucks recovery.

But Starbucks is not likely to be so lucky. With its massive size and tremendous cash-flow, McDonald's can afford to stay in the premium coffee business for years without a meaningful impact on its earnings. It sells too many hamburgers to be hurt by a slow start in latte sales.

McDonald's can wait Starbucks out and hope that, as things get worse for the coffee company, customers will turn to Ronald McDonald more frequently.

Douglas A. McIntyre can be reached at 247wallst.com.

Tomorrow afternoon, Starbucks (NASDAQ: SBUX) will be joining the earnings parade when it reports its second quarter numbers.

The last time that the company reported earnings was on January 30, when the company beat analyst expectations by a penny, posting 29 cents a share. But that was still not enough to get buyers enthusiastic about the stock.

Shares have fallen around 13% since then. This time around, analysts are looking for the company to show earnings of 15 cents a share.

McDonald's Corp. (NYSE: MCD) continues to amaze investors.

The home of the Quarter Pounder today reported net income of $946.1 million, or 81 cents a share, compared with $762.4 million, or 62 cents, a year earlier, according to the earnings press release. Revenue increased to $5.61 billion. Wall Street analysts were expected profit of 70 cents on revenue of $5.44 billion.

Gains outside the U.S. helped off-set the weak performance of its domestic business

"For the quarter, Europe and Asia/Pacific, Middle East and Africa both delivered double-digit revenue and operating income growth," the company said. "Europe's revenues rose 23% (11% in constant currencies) during the quarter to nearly $2.4 billion, fueled by an 11.1% comparable sales increase – the highest in the segment's history."

Meanwhile, the U.S. business saw comparable sales rise 2.9% and operating income jump 5.9%. Weak consumer spending is hurting the chain, though, as March comparable sales were negative. The Illinois company, however, expects sales to rebound in April to a 2% to 2.5% gain.

Let's not forget about the coffee strategy, AKA "The Starbucks (NASDAQ: SBUX) Killer." That's been a strong driver for breakfast traffic and should continue to do so for some time.

"Over the next 12 to 18 months, we're going to see coffee as a catalyst for sales," Thrivent Asset Management analyst Chris Scheurer told Bloomberg News.

This underscores why now is a good time for the great taste of McDonald's.

How is McDonald's Corporation (NYSE: MCD) holding up during the economic downturn?

The largest restaurant chain is expected to report profit of 70 cents per share on revenue of $5.4 billion, according to Thomson Financial. Their average price target for the company's stock is $62.64, above the $58.64 where it recently traded. Shares of the company are up about 20% as investors bet that the cost-conscious consumers would be attracted to cheap McDonald's food. Moreover, the company's cut rate, but delicious coffee continues to give Starbucks Corporation (NASDAQ: SBUX) nightmares. This seems to be a recipe for success boosting comparable same-store sales by 11.7% in February.

McDonald's earnings will be a clear sign of how the consumer is holding up. Many are cutting back on dining out as evidenced by the decline in same-store sales at restaurants at diverse as Ruth's Chris Steak House Inc. (NASDAQ: RUTH) to Darden Restaurants Inc's. (NYSE: DRI) Red Lobster.

But thankfully for shareholders, McDonald's isn't solely reliant on its U.S. business. During the fourth quarter, sales rose by double digits outside its home country. The company should see strong sales group in Europe and emerging markets, according to a Lehman Brothers note quoted by the Associated Press.

Despite the fact that Ruby Tuesday Incoroprated (NYSE: RT) serves up a mean burger, consumers continue to sit at home digesting more and more negative economic news. The company recently released third quarter (3Q) 2008 earnings that take away the appetite. 3Q 2008 net income was $11.7 million or $0.23 EPS, compared to 3Q 2007 net income of $28.7 million or $0.49 EPS. Same location sales declined 12-13%. Company expansion was flat with 6 new locations replacing 6 closed locations.

To be fair, some of the decline in customer traffic was due to a company-wide remodel of many locations. The company spent $25 million in 3Q updating its facilities and its menu, with plans to double that amount in the coming year in order to help Ruby Tuesday stand out from its bar and grill competition. Let's hope the remodel woos customers back into its restaurants. The company is renegotiating its existing debt covenants, and controlling advertising expenditures and other costs. CEO Sandy Beall hopes these initiatives will "set the stage for future profits."

FY 2008 guidance is not encouraging. The company expects sales to continue to decline 9-10%, leading to diluted EPS in the $0.40-$0.50 range. The stock jumped 5% on Thursday when 3Q earnings per share (EPS) beat estimates by $0.05, but has since dropped off 2% to trade at just around $8 per share.

Four well known CEOs weighed in on CNBC's Squawk Box, giving their particular insight on economic conditions one day after the Federal Reserve made yet another basis rate cut. Each of the four Chief Executives acknowledged the tough going in the economy, yet each also sought to inject a thread of optimistic patience into their commentary.

Mike Jackson, CEO, Auto Nation Inc. (NYSE: AN), came to the defense of Reserve Board Chair Ben Bernanke. While admitting that the chairman may have crawled blindly into what is now mostly economic turmoil, Jackson stated: "...I think he absolutely has it right now. He's got to be on full flight recession mode, and we'll worry about the dollar, and commodities and inflation later." Personally, I think Benanke should be making moves to protect the consumers and their dollars first, and let inflation take care of itself until the consumer sector is back up to speed.

Wilbur Ross, CEO, W L Ross & Co. Played the most obtuse card stating: "My own opinion is that it's just more of the same volatility." More of the same volatility? Yeah the economy is volatile ... DUH!

Carrols Restaurant Group (NASDAQ: TAST) owns a number of Burger King, Pollo Tropical and Taco Cabana restaurants. Unlike many restaurant chains, Carrols posted a profit in both 4Q and FY2007, based in large measure on same store sales increases of 4.6% in its Hispanic Brands restaurants. The company posted these gains despite rising commodity and labor costs and a weakening Florida economy where many of its Hispanic Brands restaurants are located.

4Q revenues increased 4.5% overall, driven by revenue increases of 5.6% in its Hispanic Brands locations. FY2007 revenues increased 5.1% to $789.4 million driven by the same factor. This was enough to generate a $2 million increase in net income to $15.1 million or EPS of $0.70. CEO Alan Vituli anticipates 2008 revenue growth at 5-6%, which translates into diluted EPS in the 70 to 75 cents range. The company has kept expenses under tight control in order to use cash generated to open 17-23 new locations in 2008.

It's not a fancy business, but the stock currently trades at $7.50 and may be worth a look for investors who want to get a piece of action on a budget.

There is a lot of talk swirling around Wall Street about the current economic slowdown, and just how hard it is going to hit businesses in the months ahead. But so for fast food giant McDonald's (NYSE: MCD), 2008 is looking pretty rosy.

After ending 2007 with a disappointing decline in same store sales, McDonald's has now shown two straight months of sales growth following today's announcement that it had a pretty impressive 11.7% jump in same-store sales during the month of February.

Its American sales saw an increase of 8.3%, while-same stores sales in Europe really took off, showing a jump of an amazing 15.4%. Last month, the company reported that January same-store sales rose by 5.7%.

Wendy's (NYSE: WEN) handling of its review of strategic alternatives has been very strange from a PR perspective. Back in June, the company earned a place on TheStreet.com's "5 Dumbest Things on Wall Street" for its slew of press releases announcing that the company was for sale: "Under its latest effort to win over Wall Street, the company has taken to announcing once a month that it's up for sale."

With its stock down about 40%, no buyer has yet emerged for the company. Today Wendy's announced that the "Special Committee of its Board of Directors, which is reviewing the Company's strategic options, believes that it is in the final stages of its review process."

That's right: a press release saying nothing except that they're almost done with their review -- What does that even mean? 2 more days? 2 more months? They don't say but they caution investors that "there is no assurance that the process will result in any changes to the Company's current plans or when a specific announcement may be made."

The press release added: "The review process being undertaken by the Special Committee has taken longer than anticipated, primarily due to the continuing turmoil in the financial markets."

What goes unsaid is that the stock's sharp decline in value would seemingly make it more attractive as an acquisition.

But with the stock down more than 7% today, it doesn't look like investors are betting on that.