McDonald's ( MCD) fourth-quarter revenue rose 10% from a year ago, buoyed by strong gains in same-restaurant results, and the company reported charge-laden earnings that were up threefold on a year-over-year basis. The company also said it will explore alternatives for its 400-restaurant Chipotle chain. The stock fell 3 cents to $32.12 in premarket trading. The fast food company earned $397.9 million, or 31 cents a share, in the quarter, compared with $125.7 million, or 10 cents a share, last year. Revenue was $5.01 billion in the most recent quarter compared with $4.55 billion last year. Earnings in both periods were buffeted by writedowns and charges, including a $104.5 million after-tax reduction in the latest quarter related to an adjustment for lease accounting. McDonald's said it was changing the way it accounts for leased property on which it has made major renovations, a step that has been taken by a number of restaurant operators over the last two months. The quarter also had a $107.6 million after-tax charge for goodwill impairment and a $32 million gain related to the sale of a real estate partnership. Netting out the items, McDonald's appears to have earned 45 cents a share in the quarter, or 1 cent less than analysts had been forecasting. McDonald's posted a comparable-restaurant sales gain of 5.1% in the quarter and said its company-owned restaurant margins rose 50 basis points to 15.3%, a key goal of the former CEOs Jim Cantalupo and Charlie Bell. Both executives died over the past year. "Through our strategic focus on operational excellence in our restaurants, and leadership marketing that continues to connect with consumers, we increased the number of customers served per day by 1.6 million," said CEO Jim Skinner, who took over from Bell in November when he resigned to battle colorectal cancer.
"Comparable sales were positive across all geographic segments during each and every quarter, and we delivered double-digit growth in sales and operating income for the year," the company said. The company left intact its target for 2005 systemwide sales and revenue growth of 3% to 5%, annual operating income growth of 6% to 7%, and annual returns on incremental invested capital in the high teens. The company expects to add about 350 new McDonald's restaurants this year. In addition, McDonald's said it's studying alternatives for Chipotle Mexican Grill. "We believe Chipotle's value and potential might be maximized through alternative strategies that could include raising additional equity capital in the public or private markets," the company said. "This would have an additional benefit of enabling us to allocate more resources to growing sales and profits at existing McDonald's restaurants."