DOW JONES NEWSWIRES
McDonald's Corp.'s (MCD) third-quarter earnings rose 5.9% as same-store sales remained positive across all its global markets, though it continues to be hurt by foreign-exchange effects.
Chief Executive Jim Skinner said the fast-food giant is beginning the current quarter from a position of strength and that it expects its same-store sales will remain positive, despite a decline in informal dining out.
Fast-food chains had been holding up better than full-service restaurants, though Morgan Stanley analysts recently indicated third-quarter results might show that has changed owing to high unemployment and tough comparisons with last year. The analysts expected "sound" results from McDonald's, though the focus on its U.S. sales and September trends may overshadow them.
McDonald's and competitors such as Burger King Holdings Inc. (BKC) and Wendy's, part of Wendy's/Arby's Group Inc. (WEN) have been adding new products--ranging from thicker burgers to value items--to lift sales. The sector is looking to rebound from disappointing summer sales where high unemployment among teenagers failed to give sales a seasonal lift. Breakfast sales have been hurt by fewer workers stopping during their commutes.
For the third quarter, McDonald's reported a profit of $1.26 billion, or $1.15 a share, up from $1.19 billion, or $1.05 a share, a year earlier.
Revenue decreased 4% to $6.05 billion on currency changes while same-store sales, or sales at restaurants open at least 13 months, rose 3.8% globally. The biggest gainer was Europe.
Analysts polled by Thomson Reuters most recently forecast earnings of $1.11 on revenue of $6.1 billion.
Operating margin rose to 31.9% from 29.1% as commodities prices eased.
The company's U.S. operations delivered 6% earnings growth, aided by its Angus burgers and McCafe espresso-based drinks. Europe saw 10% growth while Asia, Pacific and the Middle East posted 21%, led by Australia and China results.
Shares rose 2.6% to $59.85 premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;