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McDonald's profit surges on U.S. sales

/ Source: The Associated Press

McDonald’s Corp. reported Friday that fourth-quarter profits more than tripled behind the momentum of strong U.S. sales, but the fast-food chain still fell slightly short of analysts’ expectations.

Net earnings for the three months ended Dec. 31 were $397.9 million, or 31 cents per share, up from $125.7 million, or 10 cents per share, a year earlier.

The Oak Brook, Ill.-based company said it had to correct an accounting error for prior quarters that cost it $104.5 million, revising the way it calculates lease expenses. Excluding that charge and other items, operating profits were 45 cents per share — a penny shy of the estimate of analysts surveyed by Thomson First Call.

Revenues jumped 10 percent to $5.01 billion from $4.56 billion as McDonald’s continued to benefit from menu additions and extended operating hours in its U.S. restaurants.

New chief executive officer Jim Skinner, who succeeded Charlie Bell in November, said the company will add a net 350 McDonald’s restaurants in 2005 as it keeps up a modest expansion pace. He also said it is exploring ways to expand Chipotle Mexican Grill, which has more than 400 restaurants, based on that business’ growing popularity.

“Our consolidated performance continues to reflect the underlying strength of our U.S. business, which generated impressive sales and margin improvements for the second consecutive year,” Skinner said.

Bell died last week, eight weeks after leaving the top job because of cancer. He served seven months as CEO and chairman.

For the full year, McDonald’s reported net income of $2.28 billion, or $1.79 per share, up 55 percent from $1.47 billion, or $1.15 per share, in 2003. Revenues climbed 11 percent to $19.1 billion from $17.1 billion.