McDonald's earnings fall 33 percent

CHICAGO - McDonald&#39;s Corp. reported lower earnings for a sixth straight quarter Thursday, a 33 percent decline reflecting the sluggish global economy and a mad-cow scare that has hurt sales in Japan. <br> <br> The fast-food chain beat Wall Street&#39;s lowered expectations, however, citing a resurgence of sales in Europe, where consumers also had been wary of beef safety for months. <br> <br> Net earnings were $253.1 million, or 20 cents a share, down from $378.3 million, or 29 cents a share, a year earlier. <br> <br> Excluding certain charges, earnings were 31 cents a share -- 2 cents better than expected by analysts surveyed by Thomson Financial/First Call. The company also said it expects to beat Wall Street&#39;s full-year earnings estimate of $1.46, saying profits should fall in the $1.47-$1.50 range, up from $1.36 last year. <br> <br> McDonald&#39;s long-languishing stock climbed $1.40, or 5 percent, to $28.56 a share in midday trading on the New York Stock Exchange. <br> <br> Revenues rose 2 percent to $3.6 billion from $3.51 billion. Systemwide sales, which include company-operated and franchised stores, increased 1 percent to $9.7 billion from $9.65 billion. <br> <br> Chairman and chief executive officer Jack Greenberg said results were better than anticipated when the company issued an earnings warning last month, due primarily to strong sales in Europe during the last two weeks in March and better-than-expected U.S. profitability. Sales in France, Germany and Britain all climbed. <br> <br> Sales at U.S. restaurants rose 2 percent for the quarter, helped by the addition of 337 new McDonald&#39;s. But U.S. operating income fell 2 percent. The Oak Brook, Ill.-based company cited payments to owner/operators as part of its initiative to improve counter service. <br> <br> McDonald&#39;s took $142 million in non-cash charges -- $43 million for a writedown of assets in Chile and elsewhere in Latin America and 32 restaurant closings in Turkey, and $99 million for accounting changes reflecting underperforming restaurants in Argentina, Uruguay and other struggling markets in Latin America and the Middle East. <br> <br> Despite Wall Street&#39;s reaction, analyst Tony Howard of Hilliard Lyons was not impressed by the earnings report. <br> <br> &#34;It does show that Europe has turned the corner,&#34; Howard said. &#34;But even that news you have to take with a grain of salt because of the comparison to last year, when results were weak due to mad-cow disease.&#34; <br> <br> <br> ------ <br> <br> On the Net: <br> <br> http://www.mcdonalds.com <br>