090204 McDonald's Quarterly Profit Beats EstimatesFebruary 4, 2009
McDonald's Corp reported a quarterly profit that handily topped Wall Street estimates, but said it saw growth in some overseas markets soften as a U.S.-led recession went global.
Shares of the world's largest hamburger chain were down 0.5% in afternoon trade after falling as much as 2.6% earlier in the session.
McDonald's posted a 5.8% rise in worldwide December sales at restaurants open at least 13 months. The results are still ahead of most other restaurant operators, but mark a slowdown from the company's own November and October results, when McDonald's said same-store sales rose 7.7% and 8.2% respectively.
Jack Russo, an analyst at Edward Jones, said the slowdown was most prominent in international markets and showed that the "rest of the world is catching up" to the U.S. recession.
The slowdown "is affecting everybody at this point. But compared to the other carnage out there, these guys are still doing pretty good," he said.
Fourth-quarter net income fell 23% to US$985.3-million, or 87 US cents per share, from US$1.27-billion, or US$1.06 per share, a year earlier, when results included a large tax-related benefit.
Analysts on average were expecting profit of 83 US cents per share, according to Reuters Estimates.
McDonald's cited a "softening" in its business in Germany as diners reacted to price hikes. It also said fourth-quarter same-store sales decelerated in China, where growth was once red-hot.
Company executives said the world's largest economies are sliding simultaneously into recession, but that McDonald's same-store sales continue to be strong in January, with each area of the world reporting positive results.
"Our model remains recession-resistant," Chief Executive Jim Skinner said on a conference call with analysts.
McDonald's shares were down 22 US cents at US$57.80. Shares in rival Yum Brands Inc, which owns the Taco Bell, Pizza Hut and Kentucky Fried Chicken brands and has a bigger presence in China, fell 3.6%.