McDonald's Corp, the world's biggest restaurant company, on Tuesday posted a quarterly net loss after taking a big charge related to the sale of its outlets in Latin America.
Without the charge, earnings per share were up 27 percent, continuing the strong results McDonald's has posted in recent quarters as a variety of new products, extended hours and other initiatives have helped boost sales.
"McDonald's has significant competitive advantages in the fast-food industry," said John Owens, restaurant analyst at Morningstar, citing the strength of the company's brand, size and convenient locations. The company's second-quarter net loss was $711.7 million, or 60 cents per share, compared with a net profit of $834.1 million, or 67 cents, a year ago.
Excluding the Latin America charge, McDonald's earned 71 cents a share, in line with the better-than-expected forecast the fast-food chain gave last week and up from 56 cents posted a year earlier.
McDonald's in April said it would sell about 1,600 restaurants in Latin America and the Caribbean to a franchisee so it could focus resources on markets where it sees the biggest opportunities for growth, such as China. Total revenue rose 12 percent to $6.01 billion. Analysts on average were expecting revenue of $5.90 billion, according to Reuters Estimates.
McDonald's sales have been helped by the launch of premium coffee in the United States, more 24-hour restaurants and chicken snack wraps that have brought in customers outside of normal meal times, Owens said. But he also cautioned that competitors would come out with their own versions of these after seeing McDonald's success.
Chief Executive Jim Skinner in an interview with Reuters last week said that four years into the company's aggressive turnaround there was still plenty of room for the company to boost its US sales. McDonald's has said it plans to pay out a combined total of $5.7 billion for dividends and share buybacks in 2007-2008.
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