McDonald's Profit and Revenue Top Estimates

McDonald'sfrappes, smoothies and dollar menu drew in more customers in the third quarter, pushing the world's largest burger chain's net income up 10 percent.


Results beat estimates and shares rose in early trading Thursday, breaking the company's all-time high.

McDonald's earned $1.39 billion, or $1.29 per share, in the quarter ending Sept. 30, up from $1.26 billion or $1.15 per share last year. Revenue rose 4.3 percent to $6.3 billion.

Analysts expected the company to earn $1.25 per share on revenue of $6.23 billion, according to Thomson Reuters.

The tough economy has weakened people's appetites for eating out. But McDonald's, based in Oak Brook, Ill., has been outperforming the industry by giving people reasons to keep visiting its stores. The company is creating new products, such as smoothies and frappes, released this summer, to keep diners interested. It's also focusing on value—particularly its dollar menu—to appeal to people's wallets, not just their taste buds.

Revenue at stores around the world open at least 13 months rose 6 percent, led by 8.1 percent growth in Africa, Asia/Pacific and the Middle East. In the U.S. the figure rose 5 percent, while in Europe it rose 4.1 percent.

The figure is important for restaurants because it measures growth at existing locations.

The company said in Europe, results were helped by expanded hours and updated restaurants. In the U.S. people continued to respond well to the new drink options and value menu.

In other parts of the world, the same focus on value coupled with limited-time menu items drew in customers.

CEO Jim Skinner said the company expects revenue at locations open at least 13 months to grow between 5 percent and 6 percent in October.

Shares rose $1.39 to $78.80 in premarket trading, beating the previous 52-week high of $78.14.

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