Hamburger chain Wendy's International Inc. (WEN) Wednesday forecast a lower first-quarter profit due to higher beef prices, and said sales in March fell more than some analysts had expected.

Shares of Wendy's fell 3 percent.

First-quarter earnings are expected to be lower than the restated 42 cents a share earned in the 2004 first quarter, it said. The year-earlier results were cut by 3 cents a share as Wendy's restated earnings to reflect the effect of expensing stock options.

Analysts on average had forecast 43 cents a share for the 2005 first quarter, according to Reuters Estimates. to $1.42 a pound in the quarter from $1.34 a year earlier will reduce earnings by 1 cent a share, Wendy's said. The expensing of restricted stock will also cut earnings by a penny, while the shift of Easter into the first quarter in 2005 cut earnings by about half a cent and same-store sales by 1.5 percent, it said.

The company said sales at its U.S. company-owned hamburger restaurants open at least 15 months fell 5.1 percent in March. At the company's U.S. franchised restaurants, same-store sales fell in a range of 3.9 percent to 4.2 percent.

Analysts' estimates had ranged from a decline of 1.5 percent to 4 percent at company-owned stores, while same-store sales (search) at franchised stores were expected to fall between 1 percent and 4 percent.

Shares of Wendy's fell $1.14 to $38.11 on the New York Stock Exchange (search).

Beef prices for the second quarter appear to be higher than originally expected, at $1.52 a pound, up from $1.23 in 2004, the company said.

Wendy's, which has said the second half of the year will be better than the first half, stood by its full-year forecast for earnings per share of $2.17 to $2.23 a share. Analysts on average forecast $2.23 a share, according to Reuters Estimates.