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McDonald's profit falls 8.1% amid forex volatility
McDonald's, the world's largest restaurant company, said second-quarter earnings fell 8.1 per cent as currency translation blunted sales of Big Macs and fries outside the US.
- Bloomberg
- Published: 22:15 July 23, 2009
New York: McDonald's, the world's largest restaurant company, said second-quarter earnings fell 8.1 per cent as currency translation blunted sales of Big Macs and fries outside the US.
The shares declined 80 cents to $58.02 (Dh213.1) at 8.05am in early New York trading after the company reported revenue that missed analysts' estimates.
Revenue fell seven per cent to $5.65 billion, the company said yesterday in a PR Newswire statement. Analysts predicted $5.69 billion, the average of estimates compiled by Bloomberg.
McDonald's said currency translation trimmed profit 9 cents a share in the quarter. The Dollar Index, which the ICE futures exchanges uses to track the greenback against the currencies of six major US trading partners, including the euro, British pound and yen, rose more than 10 per cent in the 12 months through June. US sales have slowed as diners spend less.
"US consumer weakness and the impact from quick-service restaurant discounting, along with continued international volatility," are hurting sales, Jeffrey Bernstein, an analyst with Barclays Capital in New York, wrote in a July 10 note. He rates the stock "overweight."
Net income declined to $1.09 billion, or 98 cents a share, from $1.19 billion, or $1.04, a year earlier, when the Oak Brook, Illinois-based company recorded a 10-cent gain from an asset sale.
In the year-earlier period, McDonald's earned 94 cents a share, excluding a 10-cent gain from the sale of its stake in UK sandwich chain Pret A Manger.
Excluding some items, analysts anticipated profit of 97 cents a share, the average of 17 estimates. For the full year, analysts project earnings of $3.87 a share.
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