000449 McDonald's Posts Strong PerformanceApril 22, 2000Chicago - McDonald's Corp.'s profit rose 12% in the first quarter as strong sales in North America and Europe helped the fast-food chain beat Wall Street's expectations. Shares in the world's largest restaurant company rose 8%, or $2.75, to $35.81 1/4 in trading Thursday at 4:30 p.m. on the New York Stock Exchange in the wake of the report. McDonald's earned $450.9 million, or 33 cents a share, in the January-March period, up from $402.7 million, or 29 cents a share, a year ago. Analysts surveyed by First Call/Thomson Financial had forecast earnings of 32 cents a share. Revenues rose 10% to $3.34 billion from $3.04 billion a year ago. Analysts attributed the Oak Brook, Ill.-based company's robust performance to improvements in its restaurant operations in the United States and Europe, including the $180 million Made For You marketing strategy and computerized cooking program. Brandy Shin, a restaurant analyst for Goldman, Sachs & Co. in New York, said McDonald's earnings “look pretty good” despite investor concerns about a nearly 10% decline in sales last month. She called the company's move to repurchase 16.6 million shares of its common stock at $574 million a surprise. “That sort of underlines how confident they are on the future growth of the business and how operating trends are going to be for the year,” Shin added. “They're taking advantage of the stock price.” McDonald's operating income was up in most major markets, particularly in Asia, which climbed 24%. The one exception was Latin America, which declined 4% due to a sagging economy in several countries there, said Jack Greenberg, chairman and chief executive. “We're seeing some early signs of improvement in Latin America, but they're not where we want them,” he said in an interview, emphasizing that shortcomings there don't alter an overall strong outlook worldwide. The restaurant giant is weathering tough competition from other fast-food chains like Wendy's and Burger King with plans to introduce several new products, including two new chicken sandwiches and the McSalad Shaker that are scheduled to debut on Friday. This summer, McDonald's plans to replace its three-year-old “Did somebody say McDonald's?” tagline with “We love to see you smile,” a theme designed to improve customer relations. Despite a dominant 42% share of the fast-food market, McDonald's customer satisfaction rates were the lowest among other large operations, according to a recent University of Michigan survey.
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