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McDonald's sees profit above estimates, Asia sales up
CHICAGO (Reuters) - McDonald's Corp on Friday forecast third-quarter earnings above the average Wall Street estimate as September same-store sales rose 5.9 percent on strength in Asia.
The world's largest restaurant company forecast earnings of 83 cents a share before a gain from the sale of Boston Market. Analysts are expecting 77 cents per share, according to Reuters Estimates.
Including the gain from the Boston Market sale, the company expects earnings of 89 cents a share. McDonald's is due to report third-quarter earnings on Oct. 19.
McDonald's has outperformed many other restaurant chains and retailers this year, with breakfast items and new menu choices like chicken snack wraps doing well in the United States and extended restaurant hours helping in Asia and Australia.
For the third quarter, same-store sales at McDonald's restaurants rose 6.9 percent, including a 5.1 percent increase in the United States.
A rival, Yum Brands Inc, which owns Taco Bell, KFC and Pizza Hut, posted a 4 percent same-store sales increase globally for the third quarter, but only a 1 percent rise in the United States.
"The difference between McDonald's and Yum Brands is that while they are both growing very well overseas, McDonald's has fixed up their business domestically," Scott Rothbort, president of LakeView Asset Management, a McDonald's shareholder, said.
In September, sales at McDonald's restaurants open at least 13 months rose 3.5 percent in the United States, 5.7 percent in Europe, and 12 percent in the Asia Pacific/Middle East and Africa region, for an overall rise of 5.9 percent.
With the sluggish U.S. economy, lower-priced items like the snack wraps and cinnamon melts sold well, a McDonald's spokeswoman said.
In China, extended hours and sales of breakfast items helped boost sales, the spokeswoman said. The number of McDonald's restaurants open 24 hours in China is now 475, up from 200 previously, she said.
In Australia, 200 restaurants are open 24 hours, about 27 percent of the total for McDonald's in that country, she said.
The weak dollar also helped McDonald's earnings, adding 3 cents a share to earnings from continuing operations, the company said.
McDonald's shares were up 25 cents to $56.50 in morning trade on the New York Stock Exchange.
Through Thursday, the stock was up almost 27 percent this year, compared with a 2 percent increase for Wendy's International Inc, a 27 percent increase for Yum, and a 24 percent increase for Burger King Corp.
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