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McDonald's profits rise but miss expectations

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(Globalpost/GlobalPost)

US fast-food giant McDonald's notched a 3.7 increase in second-quarter profits on Monday, but offered a cautious outlook on the rest of 2013 given the uncertain economic environment.

McDonald's reported $1.40 billion in profits on $7.08 billion in revenues, up from last year's income of $1.35 billion on revenues of $6.92 billion. Analysts had forecast revenues of $7.09 billion.

The results translated into earnings of $1.38 per share, two cents shy of the $1.40 analyst estimate.

McDonald's chief executive Don Thompson said "the informal eating-out market remains challenging and economic uncertainty is pressuring consumer spending."

The company projected "relatively flat" global comparable store sales for July and sees results being "challenged" the rest of 2013.

Operating income in the US was "relatively flat" in the second quarter even as comparable sales rose 1.0 percent. Europe's comparable sales were down 0.1 percent, but operating income rose 5 percent.

In the Asia/Pacific, Middle East and Africa region, comparable store sales fell 0.3 percent, while operating income declined 1 percent.

"We have succeeded in a variety of operating and economic environments," Thompson said.

"I am confident that our System, global infrastructure and the unique and evolving McDonald's brand experience will enable us to deliver sustained profitable growth for the long-term."

McDonald's shares tumbled 2.3 percent in pre-market trading.

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http://www.globalpost.com/dispatch/news/afp/130722/mcdonalds-profits-rise-miss-expectations