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McDonald's Q3 profit beats Street

McDonald's Q3 profit beats Street

McDonald's (NYSE:MCD), the world’s largest burger chain, reported profit grew nine percent in the third quarter, driven by global growth and its staple foods like Chicken McNuggets and its breakfast menu, pushing shares up early Friday.

The Oak Brook, Illinois-based company’s stock rose $2.69, or 3.02 percent, reaching a high of $91.70 in pre-market trade.

For the three months that ended September 30, the fast-food chain said revenues climbed 14 percent to $7.1 billion, up from $6.3 billion, seen last year.

Net income was nine percent higher at $1.5 billion, or $1.45 per fully diluted share, up from $1.3 billion, or $1.29 per fully diluted share, a year-earlier.

The latest quarter beats market expectations of $1.43 earnings per share, on revenues of $7 billion, according to Bloomberg.

In a statement, McDonald’s chief executive, Jim Skinner, said: "Third quarter results reflect that we are executing the right strategies to grow the business for the long term while delivering consistently strong quarterly results."

"The investments we are making to optimize our menu, modernize the restaurant experience and broaden McDonald's accessibility with ongoing convenience and value platforms are driving profitable market share growth - a clear indication that our strategy is working."

Global comparable sales grew five percent during the quarter, the company said. Analysts had expected a gain of four percent.  Sales of stores open for at least one year is a metric used to gauge the financial health of a company, as it excludes sales of stores recently opened or closed.

In the US, same store sales rose 4.4 percent. The company said sales were fuelled by its Chicken McNuggets, breakfast menu and smoothies.

In Europe, third-quarter comparable sales grew 4.9 percent led by France, Russia, Germany and the U.K.  
Meanwhile, comparable sales in Asia-Pacific, Middle East and Africa rose 3.4 percent as the number of transactions increased, though somewhat offset by Japan.

Looking ahead, Skinner said that the company expects October comparable store sales to be up four to five percent, beating analyst forecasts of 3.9 percent growth. The company said it plans to release financial results for October on November 8.

McDonald’s, at the end of 2010, had about 14,000 stores in the US, and more than 18,500 overseas.

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