McDonald's profit rises even as consumers cut back

McDonald's Corp posted a 3.5 per cent increase in first-quarter profit on Wednesday, as sales at established restaurants rose amid a recession, and said April same-store sales are trending at least as strong or better.

Still, the results largely matched investor expectations and may not dazzle investors, said Oppenheimer restaurant analyst Matthew DiFrisco.

McDonald's "was exceeding expectations through much of the last two years so it will be interesting to see how the market reacts to an in-line quarter," he said.

Its shares were up 1.1 per cent at $56.26 in morning trade.

MCDONALD'S SEES US DEMAND FOR CHICKEN, BREAKFAST

McDonald's first-quarter net income rose to $979.5 million, or 87 cents per share, from $946.1 million, or 81 cents per share, a year earlier.

Excluding a 4-cent-per-share gain from the sale of its interest in Redbox Automated Retail LLC, it reported earnings of 83 cents per share, compared with analysts' average estimate of 82 cents per share, according to Reuters Estimates. Total revenue fell to $5.08 billion from $5.61 billion.

McDonald's had warned in March that the stronger dollar, which lessens the dollar-value of sales made overseas, would cut revenue by $600 million in the quarter at current rates. US results were boosted by strong demand for chicken, breakfast items and drinks, McDonald's said.

McDonald's and some other fast-food restaurants have benefited as a global economic downturn has sent customers to lower-priced fare, including the company's Dollar Menu items.

Sales at restaurants open at least 13 months rose 4.3 per cent globally. Same-store sales rose 5.5 per cent in the Asia/Pacific, Middle East and Africa markets, rose 3.2 per cent in Europe, and gained 4.7 percent in the United States.

In Europe, results were strongest in Britain, France and Russia, while in its Asia/Pacific, Middle East and Africa markets, it said a strong sales performance in Australia and Japan helped offset weaker sales in China.