Hitt og þetta 18. apríl 2006

WSJ.COM/Earnings Preview: McDonalds Reports Friday

The world's largest restaurant chain issued preliminary earnings and sales numbers last week that generally pleased Wall Street, as management continues to tweak McDonald's menu and service to good effect.

Earnings Outlook: The company preannounced a first-quarter profit of 49 cents a share, in line with analysts' estimates. The result reflects a penny hit from currency fluctuations and a 4.5 cents charge primarily for U.K. restaurant closings, offset in part by a 3.5 cents gain from its Chipolte Mexican Grill IPO. Per-share profit in the year-earlier period was 56 cents, including a tax benefit of 13 cents.

Revenue Outlook: On average, analysts polled by Thomson First Call expect $5.03 billion, up from $4.8 billion a year earlier.

Key Issues:

- Sailing along: McDonald's worldwide sales at restaurants open at least a year rose 5.2% in the first quarter, including a 6.6% rise in the U.S. Impressed Piper Jaffray analysts note that a comparable U.S. gain for March came on top of a 6.8% rise last year and a 9.9% rise in March 2004.

- Customer satisfaction: The chain has boosted sales by offering premium chicken sandwiches, a wider selection of salads and a breakfast menu that just recently could include Premium Roast Coffee. Extended hours also have helped.

- Europe: Same-store sales there rose 2% in the quarter. The U.K. remains "a sticking point," Goldman Sachs says, but McDonald's is having some success in reviving its German sales through menu changes.

- Safety concerns: Despite increasing news of the bird flu in Europe, McDonald's didn't notice significant impact to sales or shifts away from chicken products.