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Earnings Fall at McDonald's

An 8% rise in sales can't dissuade the bears.
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(MCD) - Get Free Report

third-quarter earnings eased from a gain-swollen year-ago period but were in line with the fast-food chain's raised guidance of last week.

McDonald's earned $735.4 million, or 58 cents a share, in the quarter, compared with $778.4 million, or 61 cents a share, a year ago. An asset transfer in the latest quarter resulted in a 2-cent gain, before which the company earned 56 cents a share, consistent with its Oct. 12 estimate. The year-ago quarter had a 7-cent gain.

Overall revenue rose 8% from last year to $5.34 billion, beating estimates by $90 million.

On Instinet, the shares dipped 93 cents, or 2.7%, to $32.76.

The company said it repurchased about 37 million common shares for about $1.2 billion through the first nine months of 2005. McDonald's announced a program to accelerate the buyback and raise its dividend in September shortly after activist hedge fund Pershing Square Capital became the company's biggest shareholder.

McDonald's also set plans last month to sell a minority interest in its Chipotle Mexican restaurant chain via an initial offering.