McDonald's Beats on Sales, Misses on Profit; Shares Off

McDonald's reported profits that were less than Wall Street expectations though revenues actually were higher, as the company battles a more difficult operating environment.

Following the earnings announcement, the fast-food giant's shares (MCD) slid 2.5 percent percent in pre-market trade. 

The company reported third-quarter earnings excluding items of $1.43 a share, below last year's $1.45 per share and beneath the analyst target of $1.47.

Revenue edged higher to $7.2 billion from $7.17 billion a year ago.

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Analysts expected McDonald's to post $7.16 billion in revenue, according to a Thomson Reuters estimate.

The company cited currency pressures as one reason for the lack of growth.

However, it did say global sales increased 1.9 percent and grew across each segment.

McDonald's reported $1.3 billion towards share repurchases and dividends through the quarter.

McDonald's and other fast food operators have been pressured by the European recession and a generally more difficult environment as discount pricing benefits begin to wear off.

The company warned investors that conditions ahead will be uncertain.

"We expect near-term top- and bottom-line growth to remain pressured as we focus on driving guest traffic and market share by leveraging our strategies and competitive advantages in response to the global economic, operating and competitive challenges," CEO Don Thompson said in a statement.

"As we begin (the) fourth quarter, October's global comparable sales are currently trending negative," he added.

Citigroup this week warned that more difficult year-over-year comparisons also will dim the earnings picture and warned that sales are unlikely to accelerate through the remainder of 2012. Oppenheimer and UBS likewise have said their are leery of the outlook for McDonald's.


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