McDonald's profits down for fifth straight quarter

The world's No.1 restaurant chain wound up with 15 per cent lower earnings for 2001, which chairman and CEO Jack Greenberg called the most challenging year in the company's history.

The Toronto Star
January 24, 2002

McDonald's profits down for fifth straight quarter
CEO calls 2001 most challenging year in restaurant giant's history

CHICAGO (AP) — McDonald's Corp. (NYSE: MCD) reported a 40 per cent decline in fourth-quarter profit Thursday, extending its slide to five straight quarters amid the weakened global economy and a lingering mad-cow disease scare overseas.

The world's No.1 restaurant chain wound up with 15 per cent lower earnings for 2001, which chairman and CEO Jack Greenberg called the most challenging year in the company's history.

A slight increase in long-stagnant U.S. sales in the fourth quarter and strong gains in European countries where McDonald's was hardest-hit by the mad cow-related slump — France, Britain and Germany — prompted Greenberg to say he expects 2002 profits to ``improve significantly over 2001 results," in line with previous guidance.

Net income for the quarter was $271.9 million (all figures U.S.), or 21 cents a share, down from $452 million, or 34 cents a share, in the same period a year earlier.

Excluding special items such as a restructuring of U.S. operations, earnings were 34 cents a share, matching the estimate of analysts surveyed by Thomson Financial/First Call.

Revenue rose five per cent to $3.78 billion.

The Oak Brook, Ill.-based hamburger giant's stock fell 79 cents to $26.61 a share in midday trading on the New York Stock Exchange.

For the full year, net earnings were $1.64 billion, or $1.25 a share, down from $1.98 billion, or $1.46 a share, the previous year.

Revenues were $14.87 billion, up four per cent from $14.24 billion in 2000.

The company added 1,319 McDonald's restaurants last year and 67 restaurants of its partner brands — Aroma Cafe, Boston Market, Chipotle and Donatos Pizza. Greenberg said it expects to add another 1,300 to 1,400 McDonald's and 100 to 150 other restaurants in 2002.

There are more than 28,000 McDonald's restaurants, operating in 121 countries.


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