McDonald’s Corp. reported a $735 million third-quarter net profit Thursday that was down 6 percent from the previous year, when the fast-food chain benefited from a hefty tax gain.
The results were in line with those previewed by the Oak Brook, Ill.-based company last week, when it disclosed profit figures above Wall Street forecasts. They reflect continuing momentum but slowing growth in McDonald’s U.S. business and improved results in Europe, its long-lagging No. 2 market.
Net earnings for the July-through-September period amounted to 58 cents per share, compared with $778 million, or 61 cents per share, a year earlier.
The results included a one-time gain of 2 cents per share related to the transfer of McDonald’s stake in an international market to a developmental licensee.
Earnings matched the Wall Street consensus estimate based on a survey of analysts, who revised their numbers after McDonald’s said it would top the initial forecast of 54 cents per share.
McDonald’s faced a difficult comparison against the third quarter of 2004, when its results were buoyed by a tax benefit of 7 cents per share.
CEO Jim Skinner characterized operating results as solid and said U.S. sales remain strong despite the declining sales growth. McDonald’s operating income rose 6 percent in the quarter.
The company has benefited in its U.S. restaurants this year from later operating hours and a strong breakfast business, along with the recent addition of chicken sandwiches.
Internationally, improved results in Germany helped drive significant gains in Europe during the third quarter. Comparable sales, or those from restaurants open at least 13 months, rose 5.1 percent.
Revenue in the most recent quarter rose 8 percent to $5.33 billion from $4.93 billion, slightly better than analysts’ consensus estimate of $5.25 billion.
For the first nine months of 2005, McDonald’s reported net income of $1.99 billion, or $1.56 per share, compared with $1.88 billion, or $1.48 per share, a year earlier. Revenues grew 6 percent to $15.2 billion from $14.1 billion.
