PILLSBURY &lt;PSY> HURT BY RESTAURANT OPERATIONS

  Pillsbury Corp, reporting lower
  earnings for the third quarter ended February 28, said a strong
  performance by its Foods Group was offset by Restaurants Group
  declines.
      Excluding unusual items, it said restaurants operating
  profit was down in the quarter 12 pct from a year ago as sales
  rose four pct.
      It said Burger King USA and Bennigan's reported higher
  operating profit, but profits fell sharply at Steak and Ale,
  which introduced a new menu.
      Pillsbury also reported lower profits at Distron, Burger
  King's distribution arm, and said increased investment spending
  on developing concepts - QuikWok, Bay Street and Key West Grill
  - hurt results.
      It said Foods operating profit, excluding unusual items,
  rose 10 pct with international operations and domestic breads
  and baking products major contributors to improvement in the
  quarter.
      A turnaround in grain merchandising was a major factor in
  profit improvement for the nine months, Pillsbury said.
      Pillsbury said corporate expense showed a 4.3 mln dlr
  profit in the quarter reflecting a 10.5 mln dlr gain on the
  sale of a joint interest in an Australian food company and
  lower corporate expenses, largely as a result of an early
  retirement program initiated a year ago.
      Earlier, Pillsbury reported fourth quarter earnings of 48.5
  mln dlrs, or 56 cts a share, down from 55.4 mln dlrs, or 63 cts
  a share a year ago. Sales advanced to 1.53 billion dlrs from
  1.46 billion dlrs.
      Pillsbury said loss of investment tax credits under the
  1986 Federal Tax Reform Act reduced per-share earnings by nine
  cts in the quarter and 19 cts in the nine months.
      As a result of the act, it said its effective income tax
  rate rose eight points to 48.1 pct in the quarter and 5.5
  percentage points to 49.7 pct for the nine months.
  

