OAK BROOK, ILL.— McDonald's Corporation today announced strong operating results for the first quarter, reporting diluted earnings per share of 56c, up 40% from the 40c reported the prior year. Quarterly revenues were $4.8 billion, up 9% from $4.4 billion in the same 2004 quarter, driven by a global comparable sales increase of 4.6%, the company said.
Operating income in the 2005 first quarter was $909.6 million, up 6% from the $858.4 million reported in the same quarter last year.
"We continued our positive momentum in the quarter with solid revenue and operating income growth, on top of last year's outstanding double-digit growth that included one additional day due to leap year," said Chief Executive Officer Jim Skinner said. "In March, McDonald's U.S. business marked its 24th consecutive month of positive comparable sales — a feat not achieved in nearly 25 years. I am encouraged by the ongoing strength and resilience of our U.S. business."
U.S. revenues increased 6% during the quarter, and strong comparable sales helped offset higher commodity costs, Mr. Skinner said.
Europe delivered solid systemwide sales and revenue growth, fueled by positive comparable sales results in Germany, the U.K. and France, the company said. Results for the quarter also benefited from the change in timing of Easter and related school holidays, from April in 2004 to March in 2005.
"While we continue to face economic challenges in Germany, our ongoing emphasis on offering a balanced menu featuring everyday affordability along with relevant premium menu choices is helping build sales and customer traffic," Mr. Skinner said. "Similarly, initiatives in the U.K. to enhance the image and relevance of our brand drove stronger results in the quarter.
The Asia/Pacific, Middle East and Africa segment also delivered a solid quarter, he said. The first quarter 2005 earnings per share of 56c included a tax benefit of $179 million, or 13c per share, primarily because of a favorable audit settlement in late March of the company's U.S. tax returns.
Although not required until next year, the company began expensing stock options under the new accounting rules during the quarter. In that connection, the company also shifted a portion of share-based compensation to cash-based compensation.
First quarter 2005 results include $57 million, or 3c per share, related to share-based compensation and this shift.