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McDonald’s profits better than expected

Lunchtime patrons leave The Rock 'n' Roll McDonald's in Chicago on Wednesday. (Associated Press / The Spokesman-Review)
Associated Press
Lunchtime patrons leave The Rock 'n' Roll McDonald's in Chicago on Wednesday. (Associated Press / The Spokesman-Review)

McDonald’s Corp.’s sales resurgence carried it to better-than-expected profits this spring, the company said Wednesday — an announcement that sent its stock up sharply.

Based on preliminary numbers, the fast-food giant anticipates it will easily surpass Wall Street’s forecast with earnings of about 47 cents a share when it reports second-quarter results July 22. Analysts surveyed by Thomson First Call had pegged earnings at 44 cents a share.

McDonald’s reported a 7.8 percent jump in sales from established restaurants during the April-through-June period — the biggest year-over-year increase for the second quarter since 1987.

President and CEO Charlie Bell cited success with newly introduced salads in Europe and the beginning of a music download promotion as contributing to the upswing.

The news sent McDonald’s shares for the first time back to the level they traded at the time of the April 19 death of CEO Jim Cantalupo, whose back-to-basics approach helped prompt a yearlong resurgence of the company’s sales and stock. Shares jumped $1.11, or 4.2 percent, to close at $27.79 Wednesday on the New York Stock Exchange.

• Bank of America Corp. said Wednesday its second-quarter profit soared 41 percent, easily surpassing Wall Street expectations with a boost from the results of newly acquired FleetBoston Financial Corp.

The Charlotte-based banking giant said it earned $3.85 billion, or $1.86 a share, for the three months ended in June. That compared with a profit of $2.74 billion, or $1.80 a share, for the same quarter last year.

Analysts surveyed by research firm Thomson First Call had expected earnings of $1.74 per share.

• Apple Computer Inc. posted stronger-than-expected third-quarter profit and revenues Wednesday on heavy sales of its computers and portable music players.

For the three months ended June 26, Apple said it earned $61 million, or 16 cents per share, compared with $19 million, or 5 cents per share, in the same period last year. Revenues increased 30 percent to $2.01 billion.

Excluding an after-tax restructuring charge of $6 million, the company’s net profit would have been $67 million, or 17 cents per share.

Wall Street analysts were expecting the Cupertino-based company to earn 15 cents per share on sales of $1.94 billion, according to a survey by Thomson First Call.

• Chip-maker Advanced Micro Devices Inc. posted its third consecutive quarter of profitability Wednesday, driven by strong sales of computer microprocessors and flash memory chips used mainly in cellular phones.

For the three months ended June 27, AMD earned $32.2 million, or 9 cents per share, on sales of $1.26 billion, compared with a loss of $140 million, or 40 cents per share, on sales of $645 million in the same period last year.

Analysts were expecting the company to earn 9 cents per share on sales of $1.2 billion in the second quarter, according to a survey by Thomson First Call.