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McD's meets 3Q target
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October 19, 1998: 11:58 a.m. ET
Fast-food franchiser posts double-digit growth, cites lower costs, strong sales
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NEW YORK (CNNfn) - Fast-food giant McDonald's Corp. Monday reported a 10 percent increase in third-quarter earnings, thanks largely to strong international sales and low operating costs.
McDonald's posted earnings of $482 million, or 69 cents a share, for the third quarter ended Sept. 30, compared with $449 million, or 63 cents a share, a year earlier.
Analysts expected McDonald's to earn 69 cents a share, according to First Call consensus estimates.
On an operating basis, excluding a $29.5 million quarterly charge, the company recorded income of $835 million, up 15 percent from $755 million a year ago.
Revenue totaled $3.2 billion, compared with $3 billion in the year-ago quarter.
"The U.S. delivered an extremely strong performance," President and Chief Executive Officer Jack Greenberg said.
He added management also is "delighted with our performance outside the U.S. Our unique global infrastructure gives us an advantage in dealing with cyclical issues impacting the marketplace. We are confident that our strategies are working to solidify our market position around the world."
The fast-food chain also reduced selling, general and administrative costs by 17 percent during the quarter.
It also introduced "Made for You," a new as-you-like-it food preparation system designed to reduce restaurant operating costs and offer greater menu flexibility.
Rival fast-food franchiser Burger King has been advertising special order flexibility for years.
According to McDonald's, the new system will be installed in all of its U.S. restaurants by year-end 1999. More than 1,200 restaurants already have made the transition.
For the first nine months, McDonald's had net income of $1.2 billion, down slightly from $1.23 billion a year earlier. Earnings per diluted share were flat at $1.71.
McDonald's said its international operations delivered solid income growth for the quarter, due largely to a $73 million, or 13 percent, constant currency increase in combined restaurant operating margin dollars.
For the nine months, these margins increased $227 million, or 14 percent on a constant currency basis, driven principally by Europe.
Sales in Asia/Pacific and Latin America also churned out double-digit growth.
McDonald's bought back about $1.1 billion of stock during the nine-month period and announced a new $3.5 billion repurchase program.
Shares of McDonald's (MCD) were trading down 1-3/16 at 67 following the news on the New York Stock Exchange. 
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McDonald's
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