McDonald's Blames Profit Drop on the Dollar

Blame it on currency -- McDonald's ( MCD) is.

The fast-food chain saw an 8% drop in second-quarter earnings, which it attributed to the stronger U.S. dollar.

Nonetheless, investors were not in the mood for excuses, as shares fell 3% to $57.24 in pre-market trading.

During the quarter, the company earned $1.09 billion, or 98 cents a share, compared with $1.19 billion, or $1.04 a share, in the year prior. Analysts expected a profit of 97 cents.

In June, McDonald's warned that foreign-currency fluctuations would reduce earnings between 8 cents and 9 cents and full-year profit by 20 cents a share.

The company's revenue slipped 7% to $5.65 billion, but its total same-store sales jumped 4.8%, including a 3.5% gain in the United States.

On the brightest side, the company said it is gaining market share with the help of its McCafe initiative, and as consumers trade down to lower-priced dining options amid the recession.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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