McDonald's value menu entices customers in first quarter

OAK BROOK, Ill. — McDonald's Corp.'s first-quarter profit surged as it drew more diners seeking cheap meals with its new breakfast dollar menu and standbys like Chicken McNuggets.

The world's largest hamburger chain said Wednesday that sales rose across all its markets, especially Europe and Asia, as more customers visited its restaurants. The company's U.S. sales rose as well, though more slowly than elsewhere.

Its stock gained 25 cents to $70.59 in premarket trading.

McDonald's, based in Oak Brook, Ill., generally outperformed most competitors in the recession. But even its long run of sales growth has come under pressure amid high unemployment.

The fast-food operator earned $1.09 billion, or $1 per share. That compares with earnings of $979.5 million, or 87 cents per share, in the same quarter last year.

Revenue for the period ended March 31 rose 10 percent to $5.61 billion, an encouraging sign, as the chain's revenue dropped in four of the past five quarters as consumers dealt with high unemployment.

The performance was better than Wall Street predicted, as analysts surveyed by Thomson Reuters had forecast a first-quarter profit of 96 cents per share on revenue of $5.52 billion.

Customers snapped up McDonald's drinks such as frappes and beverages from its McCafe line. Its new breakfast dollar menu also resonated with consumers as they sought out fast and cheap meals to start off their day.

A key U.S. sales figure also rose, with sales at domestic restaurants open at least a year up 1.5 percent during the quarter.

This figure is a key indicator of a restaurant operator's health because it measures results at existing restaurants rather than newly opened ones.

Worldwide sales at restaurants open at least a year grew 4.2 percent, with Europe climbing 5.2 percent and Asia/Pacific, the Middle East and Africa up 5.7 percent.

Looking ahead, Skinner said McDonald's global sales at stores open at least a year are "at least as strong" as its first-quarter results.