LOS ANGELES – McDonald's Corp. (MCD) Thursday reported a 42 percent rise in quarterly net earnings that was in line with a better-than-expected forecast the fast-food company gave last week.
The results were boosted by a one-time gain of $179 million for the settlement of a tax audit. Strong sales of new products like a stronger coffee blend in the United States and improved results in Europe also contributed to the increase.
Net income for the first quarter rose to $727.9 million, or 56 cents per share, from $511.5 million, or 40 cents a share, a year earlier.
Excluding the one-time benefit of 13 cents a share, and 3 cents a share in costs for stock-based compensation, McDonald's earned 46 cents a share — above Wall Street analysts' average estimate of 43 cents a share, according to Reuters Estimates.
Revenue rose 9 percent to $4.8 billion, or an increase of 6 percent excluding the impact of a weaker U.S. dollar. Analysts had been expecting revenue of about $4.7 billion, according to Reuters Estimates.
Last week, McDonald's reported a better-than-expected 6.8 percent rise in March sales at worldwide stores open at least 13 months, thanks to strong demand for new menu items and a shift in the Easter holiday. The company recently introduced a new, stronger coffee blend, one of the many additions to its U.S. menu that have helped revitalize sales in the last two years.
McDonald's U.S. business has also enjoyed success with healthier menu items like salads and apple slices, as well as new chicken offerings like fried chicken strips.
It plans to test espresso drinks in some of its U.S. stores this summer.
Strong sales results helped offset higher food commodity costs, McDonald's said in a statement.
In Europe, a market McDonald's is still trying to turn around, sales in places like Germany and Britain have benefited from new, lower-priced and premium menu offerings and efforts to boost the image of the McDonald's brand, the company said.