McDonald’s Supersizes Its Profit in the 2nd Quarter

McDonald’s Corp. said its profit jumped 45% in the second quarter to $518.1 million, or 37 cents a share, matching analysts’ estimates, amid higher sales overseas and heavy promotional activity in the U.S. that beefed up sales.

The world’s largest fast-food chain also said it is on track to add 1,750 restaurants this year. About 90% of those will be outside the U.S., the focus of the company’s expansion.

McDonald’s said its total revenue rose 7.1% to $3.41 billion, led by strong sales in Europe and the Asia/Pacific regions. Sales for all restaurants, including those of its franchisees, were up 7.3% to $9.92 billion.

In the U.S., sales at owned and franchised restaurants rose 5% to $5.18 billion as three successful Happy Meal promotions--Furby, Tarzan and Teenie Beanie Babies--lured families into stores.

The company does not release figures for sales at outlets open at least a year, an industrywide measure of performance.

Cost-cutting also helped the strong profit growth.

In Latin America, sales were up 15%. Sales rose 9% in Europe and 16% in the Asia-Pacific region, markets where McDonald’s has been adding new restaurants.

The results illustrated the continued room for expansion overseas, while reflecting the near saturation of the domestic fast-food business.

At a Glance

Other earnings, excluding one-time gains and charges unless noted:

TECHNOLOGY:

* Adaptec Inc. reported a profit of $50.5 million, or 46 cents a share, in its fiscal first quarter, contrasted with a loss of $58.7 million, or 51 cents, a year ago, helped by reduced costs. Revenue rose 6.5% to $192.4 million.

* Barnesandnoble.com Inc. said its loss narrowed to $22 million, or 17 cents a share, in the second quarter, from $23.7 million, or 21 cents, a year ago, a better performance than the 24-cents-a-share loss analysts were expecting. Revenue more than tripled to $39.1 million from $11.4 million.

* Gateway Inc.’s earnings jumped 47% to $89.2 million, or 56 cents a share, a penny higher than analyst forecasts, driven by consumer PC demand as well as services such as Internet access and financing. Sales grew 18% to $1.91 billion.

* General Instrument Corp.’s profit from operations jumped 49% to $44.6 million, or 24 cents a share, 2 cents higher than estimates. Revenue rose 7.9% to $527 million, with a boost from digital cable-box sales.

* Level 3 Communications Inc. said its second-quarter loss from operations widened to $127 million, or 37 cents a share, from a loss of $34 million, or 11 cents, a year ago, on higher construction-related expenses and hiring costs. Analysts expected a loss of 42 cents. Sales increased 2.9% to $106 million.

* Sun Microsystems Inc.’s profit rose 30% in its fiscal fourth-quarter to $395.2 million, or 48 cents a share, as sales jumped 22% to $3.51 billion. Analysts expected 46 cents, the average estimate from First Call Corp. Some unpublished forecasts were as high as 48 cents.

OTHER INDUSTRIES:

* Franklin Resources Inc. said its fiscal third-quarter earnings fell 5.9% to $123.3 million, or 49 cents a share, including a $58.5-million charge for a restructuring that cut about 560 jobs. The results beat estimates by 3 cents. Operating revenue declined 15.7% to $566.78 million.

* Providian Financial Corp.’s profit soared 101% in the second quarter to $126.5 million, or 87 cents a share, as the issuer of credit cards to consumers with tarnished credit attracted more customers. The results beat the latest estimates of 86 cents by analysts surveyed by Bloomberg News. Revenue surged 84% to $990.9 million.

Providian also took a one-time $20-million charge to cover refunds to consumers it said were charged “erroneous” late fees over a period of several months because of a computer error. The company said it has fixed the problem.

* Raytheon Co. reported a 12% increase in second-quarter operating profit to $294 million, or 86 cents a share, matching forecasts, on higher aircraft sales and cost cuts in its electronics division. The maker of Patriot missiles and Beech aircraft said sales rose 2.4% to $5.2 billion.

* Sears, Roebuck & Co. said its second-quarter profit rose 4% to $331 million, or 86 cents a share, a penny higher than estimates, as improved results in its credit operations helped offset weak sales in its stores. The largest U.S. department store operator said revenue fell 3.1% to $9.99 billion. The revenue decline reflects, in part, the sale of its HomeLife furniture and Western Auto businesses, as well as a 13% fall in credit-card revenue. Sales at stores open at least a year were up an anemic 1% as the company continued to lose customers to competitors.

* Textron Inc. said second-quarter profit rose 40% to $162 million, or $1.05 a share, 2 cents higher than estimates, as sales rose in all four of its businesses. The maker of Cessna airplanes and Bell helicopters said revenue grew 16% to $2.89 billion.

* United Parcel Service Inc. said second-quarter profit rose 28% to $588 million, or $1.04 a share, as it boosted domestic shipments and international operating profit nearly tripled. Revenue rose 7.4% to $6.56 billion as UPS shipped 3.5% more packages in the United States and express volume jumped 29% in the Asia/Pacific region. Domestic revenue rose 6.8% amid a better mix of products and more revenue per piece. Privately held UPS is also shipping more goods ordered over the Internet.