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McDonald's net revenues slumping

CHICAGO — More hungry diners gobbling its cheap eats helped McDonald’s Corp.’s sales and profit grow in its fourth quarter, the company said today in an earnings report showing it continued to weather the downturn better than many of its fast-food competitors.

But sales growth at its U.S. restaurants continued to slow and net revenue fell for the year.

For the three months that ended Dec. 31, the world’s largest burger chain earned $1.22 billion, or $1.11 per share. That’s 23 percent more than a year earlier when it earned $985.3 million, or 87 cents per share.

Excluding a one-time benefit of 8 cents per share, McDonald’s profit topped analyst estimates by a penny per share. Analysts surveyed by Thomson Reuters, who typically omit one-time items from their estimates, expected the chain to earn $1.02 per share for the quarter.

Revenue climbed 7 percent to $5.97 billion from $5.57 billion. Analysts expected revenue of $5.94 billion.

Because of its size and its increasingly popular dollar menu, McDonald’s was an early beneficiary of the recession as diners traded down from pricier restaurants.

But sales at its restaurants that have been open at least a year have slowed as penny-pinching diners tried to cut back still further.

The figure grew 2.3 percent worldwide for the fourth quarter and 0.1 percent in the U.S., McDonald’s said Friday. That was its weakest quarterly increase in at least three years.

The figure is an important measure for restaurants because it excludes the effect of restaurants opening or closing during the year.

Analysts expect the restaurant chain’s fortunes to improve again soon — but not significantly until the U.S. economy revives.

McDonald’s CEO Jim Skinner told investors in a statement Friday that January sales so far in locations open at least a year were up around the globe.

R.W. Baird analyst David E. Tarantino told investors in a research note that the results the company reported include “respectable” revenue trends.

For 2009, McDonald’s profit climbed 6 percent to $4.55 billion, or $4.11 per share. Its revenue slipped 3 percent to $22.74 billion.

McDonald’s is based in the Chicago suburb of Oak Brook, Ill.

Its shares climbed 96 cents, or 1.5 percent, to $64.16 in morning trading Friday.


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