McDonald's 40% profit drop fifth losing quarter in a row

The world's Number 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 25, 2001

McDonald's 40% profit drop fifth losing quarter in a row
Mad-cow disease scare made 2001 ‘challenging year’

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

The world's Number 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 forecasts.

Net income for the quarter was $271.9 million (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 5 per cent to $3.78 billion.

Shares of the hamburger giant, based in Oak Brook, Ill., fell 93 cents to $26.47 yesterday in New York.

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


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