MCDONALD'S Corp, the world's largest restaurant company, said fourth-quarter profit rose after specialty coffees and US$1 double cheeseburgers lured customers and it recorded a tax benefit.
McDonald's posted net income of US$1.27 billion, or US$1.06 a share, up from US$1.24 billion, or US$1 a share a year earlier, when the spinoff of Chipotle Mexican Grill Inc boosted earnings. The results, excluding the tax gain, exceeded analysts' estimates.
McDonald's increased coffee sales and launched the US$1 double cheeseburger, blunting the impact of discount burgers by Burger King Holdings Corp and Wendy's International Inc.
"McDonald's continues to roll along," said Giri Cherukuri, who helps manage US$1.1 billion at Oakbrook Investments LLC.
Sales of its United States restaurants open at least 13 months were unchanged in December, trailing a median estimate among four analysts surveyed by Bloomberg News of 2.8 percent.
Excluding the tax gain, McDonald's earned 73 cents a share. Fifteen analysts surveyed estimated average profit of 70 cents. McDonald's spun off Chipotle, a Mexican food chain based in Denver, to focus on expanding its namesake burger chain.
Global comparable-store sales have gained for 56 straight months through December.
McDonald's is adding a US$1 chicken sandwich and a chicken biscuit to go alongside dearer sandwiches, meal-sized salads and breakfasts.
McDonald's, which operates more than 31,000 restaurants in 118 countries, extended its US strategy overseas, accelerating sales in Europe and the Asia/Pacific region.
Denis Hennequin, McDonald's European chief, said new products will advance sales. The restaurant company plans to add a new chicken sandwich and a "gourmet burger" in Europe this year and expand sales of coffee and a chicken snack wrap that the company introduced in the US in 2006.
"We haven't built our sales in recent years on promotions and discounts," he said. "The momentum was strong in 2007."
In the US, the company plans to install coffee counters selling cappuccino and lattes to its almost 14,000 US locations through 2009. It started selling a stronger coffee blend in 2006 to capture sales from Starbucks Corp.