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McDonald's profits jump 56 percent
Earnings at world's biggest fast-food chain meet forecasts, boosted by strong sales in the quarter.
April 28, 2004: 8:08 AM EDT

NEW YORK (CNN/Money) - McDonald's Corp. Tuesday posted first-quarter profits that rose 56 percent from a year earlier and met Wall Street forecasts on the back of stronger-than-expected sales at its U.S. outlets.

The world's biggest fast-food chain said it earned net income of $511 million, or 40 cents a share, up from last year's $327 million, or 29 cents a share. Analysts had forecast a profit of 40 cents a share, according to First Call.

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Revenue rose 16 percent to $4.4 billion from $3.8 billion. Analysts had forecast revenue of $4.2 billion for the quarter.

McDonald's (MCD: Research, Estimates) rose 83 cents in after-hours trading on Instinet after closing down 12 cents to $27.20 in regular trading on the New York Stock Exchange.

McDonald's last week named Charlie Bell as its new chief executive officer after Jim Cantalupo's untimely death of an apparent heart attack.

"Last week we suffered the tragic and sudden loss of our esteemed chairman and chief executive officer, Jim Cantalupo. Jim was an incredibly inspiring and passionate leader whose legacy and impact on our system are as far reaching as our restaurants around the world," Bell said in a statement.

"My management team and I remain firmly committed to strengthening McDonald's relevancy and continuing the momentum that began under Jim's leadership."

Same-store sales, or sales at restaurants open at least a year among the company's more than 30,000 worldwide hamburger restaurants, rose 9.4 percent in the quarter.

Operating margins at the company-owned outlets rose 14.3 percent compared to last year while in the U.S. profit margins at McDonald's-owned restaurants rose 18.2 percent.

McDonald's quarterly sales increase was helped by strong sales at its U.S. restaurants and by a pick-up in European sales trends following the launch of the McDonald's salad plus menu in several markets this year.

"We're glad to see that sales in Europe have turned around. McDonald's said nothing about Asia so that could mean that they're still sucking wind there," said Dean Haskell, analyst with JMP Securities.

"The market has a high expectation for comparable sales going forward but it may be difficult for the company to keep this kind of momentum going forward," Haskell said.

McDonald's is expected to host a conference call with analysts Wednesday to discuss its first-quarter earnings.  Top of page




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