HispanicBusiness

McDonald's Corp. said Wednesday its fourth-quarter results beat expectations for profit and same store sales, giving a much-needed boost for the world's largest restaurant company recently battling slipping sales. But the Oak Brook-based burger giant warned of a long, cold winter ahead.

Net income rose 1 percent to $1.4 billion, or $1.38 per share. Revenue increased 2 percent to $6.95 billion and global same-store sales increased 0.1 percent. Analysts had been expecting earnings per share of $1.33 and a 0.3 percent decline in same store sales.

In the United States, McDonald's reported same store sales up 0.3 percent, citing a re-emphasized value menu and "compelling premium options." Same store declined in Europe, however, down 0.3 percent, as a result of fewer customers coming into stores.

Motely Fool analyst Blake Bos said he was particularly pleased to see operating income improvements in Europe, up 7 percent adjusting for currency.

"I think Don got the monkey off his back this quarter," Bos said of McDonald's CEO Don Thompson in an interview, noting that Europe is the chain's largest market, accounting for more than half of its total sales.

The restaurant chain has been in the hot seat with investors for months, after reporting in October that same store sales slipped. It was the company's first monthly decline in more than nine years and lead to a change in McDonald's U.S. leadership. Jeff Stratton, the company's former global chief restaurant officer, stepped in to run the U.S. business and has refocused its emphasis on the dollar menu.

Sales in the company's Asia Pacific, Middle East and Africa division also declined, 1.7 percent, due to weakness in Japan and other markets.

For the full year, same store sales rose 3.1 percent as revenues rose 2 percent, to $27.57 billion.

"McDonald's continued to grow by remaining focused on what matters most to our customers, although our results reflect the impact of the challenging global operating, economic and competitive environment," McDonald's CEO Don Thompson said in a statement.

The company cautioned that the balance of the winter is going to be difficult for the company, and that January same store sales are likely to decline compared with the year before, when unusually warm weather kept customers coming to restaurants.

Janney analyst Mark Kalinowski adjusted his expectations for January to a 1 percent decline. He added that February same store sales are also likely to be "solidly negative," due in part to one less day in the month in 2013.

However, he wrote, "with comparisons getting gradually easier beyond February in general, we believe opportunities exist for McDonald's same-store sales to generally accelerate as 2013 proceeds." Kalinowski maintained his buy rating on McDonald's stock.

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