McDonald's Tops Estimates by a Penny

The world's largest fast-food franchise, McDonald's (MCD Quote), beat analysts' forecast Thursday, with net income rising 12% from stronger Asian demand for its burgers, fries and Hello Kitty promotions.

The Oak Brook, Ill.-based company said it had earned 33 cents a share for its first quarter, a penny better than analysts polled by First Call/Thomson Financial and up from 29 cents in the first quarter of 1999.

McDonald's net income rose to $451 million on revenues of $3.43 billion compared with income of $403 million on sales of $3.04 million in the year-ago period.

McDonald's also said Thursday it would buy back $1 billion more worth of shares, bringing its three-year repurchase program to $4.5 billion.

The franchise, with more than 26,000 restaurants in 119 countries, said the strongest revenue growth came from China, South Korea, Taiwan and Japan with the promotion of children's icon Hello Kitty.

Shares of McDonald's rose 2, or 6%, to 35 1/16 in early trading, This surge comes after the stock declined steadily after JP Morgan analyst John Ivankoe downgraded it April 13, citing weakness in the company's early April sales. (McDonald's closed up 2 3/4, or 8%, at 35 13/16.)

Ivankoe said in a research note that sales in the U.S. in the quarter would not match up to those of last year when McDonald's was promoting Furby dolls and the Monopoly game.

New products McSalad Shakers, Chicken McGrill and Crispy Chicken sandwiches will be available in all McDonald's U.S. restaurants beginning Friday, Alan Feldman, president of McDonald's U.S.A, said in a statement. "The McSalad Shaker's innovative packaging makes it easy for customers to enjoy a crisp, fresh, healthy Chef, Grilled Chicken Caesar or Garden salad on the go," he said.