McDonald's squeezes more profit from revenue drop
Posted: 22 April 2009 2359 hrs

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CHICAGO : Fast-food leader McDonald's said Wednesday it pumped up first-quarter profit by four percent to 979 million dollars, despite a 10 percent decline in worldwide revenues.

The US-based hamburger maker did get a lift from a one-time gain from the sale of a stake in the Redbox DVD rental unit, but also said it boosted profitability and market share in many regions.

The earnings amounted to 87 cents per share, roughly in line with market expectations excluding the one-time gains.

Revenues fell 10 percent from a year earlier to 5.07 billion dollars, but same-store sales increased by 4.3 percent, with more consumers looking for value during the economic crisis, the Illinois-based firm said.

"McDonald's continues to deliver a relevant restaurant experience that provides consumers with a broad range of quality menu choices, affordable prices and unmatched convenience," said chief executive Jim Skinner.

"Our underlying business performance remains strong. In constant currencies, first-quarter results reflect higher revenues, operating income and earnings per share over the prior year."

The company said profits rose despite the negative impact of a stronger dollar.

In the US market, operating profits rose 6.0 percent, with the company citing rising market share and increased sales of chicken, breakfast and beverages

Elsewhere, the company said it had "solid" results in Europe led by Britain, France and Russia, with operating income up one percent on a constant currency basis.

In the Asia Pacific, Middle East and Africa region, operating profit increased 11 percent "driven by performance in Australia and Japan, partly offset by weaker sales in China."

"McDonald's business remains strong, despite the economic concerns around the world," Skinner said.

"Our well-known value proposition and unparalleled convenience continue to resonate with customers. In fact, the momentum has continued with April comparable sales trending at least as strong or better than first-quarter sales in every area of the world. I remain confident that we have the right strategies in place to grow the business and provide value into the future."

A company official said the lower revenues reflected currency factors and an increase in franchising which restructures company receipts.

McDonald's stock rose 1.28 percent to 56.34 dollars in midday trade.

- AFP /ls