McDonald's Profit Rises on Asian Sales, Weak Dollar
McDonald's posted a 27 percent increase in quarterly profit Friday, helped by strong sales in Asia and the weak dollar.
The earnings, which the company previewed a week ago, continued the strong performance the world's largest restaurant chain has seen in recent years as a variety of new products, longer restaurant hours and strength internationally have helped revitalize the company.
"They continue to put up strong numbers," Janna Sampson, co-chief investment officer at Oakbrook Investments, said, adding that the stock, which is up 28 percent this year, is still worthwhile for some investors.
"I think there definitely is value there for somebody who is getting in for the long run," she said.
For short-term investors, a weakening U.S. economy is still a possible concern, she said. Oakbrook owns about 245,000 McDonald's shares.
McDonald's said third-quarter profit rose to $1.07 billion, or 89 cents a share, from $843.3 million, or 68 cents a share, a year earlier.
Before a gain from the sale of its Boston Market business, earnings were 83 cents a share, matching what McDonald's preannounced a week ago.
The company has outperformed many other restaurant chains and retailers this year, with breakfast items and new menu choices like chicken snack wraps that have done well in the United States. Extended restaurant hours helped in Asia and Australia.
Sales at stores open at least 13 months rose 11.4 percent in the quarter in the Asia/Pacific, Middle East and Africa segment, outpacing a 5.1 percent increase in the United States and 6.5 percent in Europe.
Revenue rose 7 percent to $5.90 billion. Sales excluding currency translation were up 3 percent. The weaker dollar boosts the value of sales overseas when they are converted to dollars on the company's income statement.
McDonald's shares were up 11 cents at $56.90 on Friday on the New York Stock Exchange. The stock trades at about 18.3 times estimated 2008 earnings, compared with a multiple of 18.7 for the Dow Jones U.S. Restaurants and Bars index.