Debating Room - McFun - For Sale - Search - What's New? - Mailing List
14/12/01 . by Unknown . Associated Press . Chicago, IL
McDonald's Projects 4thQ Loss
McDonald's Corp. announced Friday that it expected profits to sink in the fourth quarter compared with a year ago - its fifth consecutive year-on-year quarterly decline.
Net profit for the fourth quarter is expected to be between 21 cents and 22 cents a share as sales in Asia were hurt because of concerns about the safety of the beef supply in Japan, the company said in a press release. A year ago, the company had a net profit of 34 cents per share in the fourth quarter.
Excluding one-time charges of more than $235 million related to job cuts, the consolidation of certain divisions and other expenses, the world's largest fast-food chain expects to report fourth-quarter operating earnings of 34 cents per share, a penny below expectations of analysts surveyed by Thomson Financial/First Call.
McDonald's did have some optimistic news: Sales continue to rebound in Europe after previous concerns about the safety of beef on that continent, and U.S. sales grew 2 percent quarter-to-date and year-to-date through November.
The company said the fears about Japanese beef were unwarranted because its restaurants there do not use locally produced beef.
The stock price responded Friday, climbing $1.35, or more than 5 percent, to $26.99 a share.
McDonald's predicted that full-year net profit would be between $1.25 and $1.26 per share. The company said 2002 earnings per share, excluding special items, are expected to increase between 5 percent and 10 percent.
The company announced two months ago that it was shedding 500 to 700 jobs and closing nearly half of its regional offices as part of a reorganization aimed at reducing costs and improving customer service and sales. The cuts affect about 10 percent of its corporate work force.
``We believe our restructuring, ongoing change initiatives and renewed focus on quality, service, cleanliness and value will help drive improved results going forward,'' said Jack Greenberg, chairman and chief executive officer of the fast food giant.
The Oak Brook-based company has more than 29,000 restaurants in 121