McDonald's Earnings Up 12% on Strong Global Sales
The fast food giant reported net income for the second quarter of $1.23 billion, or $1.13 per share, up from $1.09 billion, or 98 cents in the year ago period. Revenue rose 5% to $5.95 billion from $5.65 billion. Analysts expected McDonald's to report earnings of $1.12 per share and revenue of $5.9 billion for the second quarter of 2010.
McDonald's reported global comparable sales increased 4.8% in the quarter and in June, but analysts expected a 5% rise in the quarter and a 5.3% rise in June. U.S. comparable sales were up 3.7%, Europe's up 5.2% and Asia/Pacific, Middle East and Africa's up 4.6%. Sales by company-operated restaurants rose 4% to $4.01 billion, while revenues from franchised restaurants rose 8% to $1.93 billion.
"McDonald's second quarter reflects strong top-line and bottom-line results with each area of the world generating higher comparable sales, traffic and profits," said CEO Jim Skinner. "This performance demonstrates the popular appeal of McDonald's relevant menu choices."
In the U.S., operating income rose 7% as sales were driven by the beverage line-up, featuring cold drinks such as the new Frappes and value-based beverages, as well as classic core menu items and the dollar menu, the company said. France, Russia and the U.K. fueled Europe's 9% operating income increase. Australia and China led Asia/Pacific, Middle East and Africa's 19% quarterly operating income increase.
Skinner added, "I am pleased with our second quarter performance and confident in our ability to continue to deliver solid results. As we begin the third quarter, our momentum continues with July global comparable sales trending in-line with or better than second quarter sales."
Shares of McDonald's fell some 1.5% in premarket trading to around $70.30. Year-to-date, shares gained some 14%. The S&P 500 declined 1.9% year-to-date.