McDonald's Corp., the world's largest restaurant company, said Tuesday its fourth-quarter profit rose 53 percent on continuing strong sales at its U.S. outlets and improving results in Europe. The results were in line with the preliminary earnings figures released by the company Jan. 17. Net income for the last three months of 2005 was $608 million (495.4 million euros), or 48 cents per share, up from $398 million, or 31 cents per share, a year earlier.
That matched the consensus estimate of analysts surveyed by Thomson Financial, based on McDonald's updated earnings forecast last week. Revenue rose 4 percent to $5.23 billion (4.26 billion euros) from $5.01 billion (4.08 billion euros).
Same-store sales, or those from restaurants open more than a year, increased 4.2 percent in the fourth quarter and have now risen for 32 consecutive months since McDonald's ended a rare slump in 2003.
Extended operating hours, cashless payments and new menu items all have helped keep the momentum going in McDonald's U.S. restaurants, which also got a fourth-quarter boost from stronger breakfast sales.
"Our performance reflects the ongoing strength of our U.S. business where we continue to leverage our convenience and build upon the successful initiatives launched over the past few years," CEO Jim Skinner said.
In Europe, where its sales have lagged, the company said strong results in France and Russia and improvements in Germany had led to a modest 2.6 percent overall increase in same-store sales for the year.
Skinner said the company plans to repurchase about $1 billion of its stock in the first quarter and will open 800 new McDonald's restaurants this year as part of a $1.8 billion (1.47 billion euros) capital spending plan.
McDonald's management was expected to give details on a conference call later Tuesday of a plan to improve the performance of McOpCo, the division that owns about 8,100 of its 31,700 restaurants.
The company has been resisting pressure by activist shareholder William Ackman, whose hedge fund Pershing Square Capital Management LLC owns about 4.5 percent of McDonald's stock, for a spinoff involving company-owned restaurants.
Ackman pressed McDonald's publicly last week to put its company-owned restaurants into a separate corporation and sell 20 percent of it to public shareholders. He also wants McDonald's to sell 1,000 company-owned stores to franchisees, all as part of a plan to boost the company's share price. McDonald's stock has risen steadily since pulling out of a nosedive in early 2003 but remains well off its all-time high of $49.56 per share on Nov. 12, 1999. Shares rose 49 cents, or 1.4 percent, to $36.20 in morning trading on the New York Stock Exchange. For the full year, the company had net income of $2.6 billion (2.12 billion euros), or $2.04 per share, up 14 percent from $2.3 billion, or $1.79 per share, in 2004. Revenues increased 7 percent to $20.5 billion (16.7 billion euros) from $19.1 billion (15.5 billion euros), reports the AP. D.M.