CHICAGO (AP) — Net income climbed 12 percent at McDonald's Corp. in the second quarter as customers around the globe gobbled up its cheap food and U.S. diners responded to its profitable frappes and other drinks on its hit McCafe menu.
The world's largest hamburger chain also got a boost from business in customers in China and Australia.
R.W. Baird analyst David Tarantino wrote in a research note that Friday's results showed "healthy" revenue growth but said investors have hoped for even higher figures.
Citi analyst Greg Badishkanian called the company's performance "fairly benign" and might be a disappointment after the company's stock climbed more than 7 percent in the past two weeks as investors awaited Friday's announcement.
Still, McDonald's has outpaced many of its competitors in recent years, particularly in the U.S. where its value menu helped insulate it from much of the economic weakness that's hurt competitors such as Burger King Corp. and Wendy's/Arby's Group Inc.
"These are strong results in today's environment where we still see nearly double-digit unemployment and low consumer confidence," Chief Operating Officer Don Thompson told investors during a conference call with investors.
For the three months that ended June 30, McDonald's earned $1.23 billion, or $1.13 per share. That's up from last year's net income of $1.09 billion, or 98 cents per share.
Revenue climbed 5 percent to $5.95 billion. That's up from $5.65 billion last year.
Both figures topped Wall Street forecasts. Analysts surveyed by Thomson Reuters were expecting McDonald's Corp. to earn $1.12 per share on revenue of $5.91 billion.
Meanwhile, sales at locations open at least a year climbed 4.8 percent during the quarter. The measure — an important figure that tracks restaurant performance — climbed 3.7 percent in the U.S. while rising 5.2 percent in Europe and 4.6 percent elsewhere around the globe.
In the U.S., where McDonald's has almost 14,000 of its more than 32,000 restaurants, operating income climbed 7 percent to $895.1 million. Revenue in the U.S. rose 2 percent to $2.08 billion as more customers came into restaurants to buy breakfast meals or the company's popular drinks like smoothies and the icy coffee drinks called Frappes.
"This is a product that our customers truly love," Thomson said of the smoothies that proved so popular the company had to scrap free sampling of the the fruit-and-yogurt drinks to keep the drink in stock.
McDonald's is based in Oak Brook, Ill.
Its shares fell $2.18, or 3.1 percent, to $69.22 in midday trading Friday.
