McDonald’s earnings up sharply

Strong momentum at its U.S. restaurants and improved sales in Europe helped McDonald’s Corp.’s fourth-quarter income rise 53 percent, sending the fast-food chain’s stock to a 5 1/2 -year high Tuesday.

Up next for U.S. customers: three new products that McDonald’s hopes will keep sales from slowing. Its spicy chicken sandwich, premium roast coffee and Asian salad all are due out by spring.

The fourth-quarter numbers all were foretold by the company in guidance a week earlier, but Wall Street continued to endorse McDonald’s performance. Shares rose 14 cents to close at $35.85 on the New York Stock Exchange after reaching $36.31, their highest price since June 2, 2000, and have nearly tripled in value since pulling out of a nosedive in early 2003.

“To state the obvious, McDonald’s is on a bit of a roll,” Chief Financial Officer Matthew Paull told analysts, citing the stock rise and 32 straight months of higher same-store sales.

Net income for the last three months of 2005 was $608 million, or 48 cents per share, up from $398 million, or 31 cents per share, a year earlier. Revenue rose 4 percent to $5.23 billion from $5.01 billion.

The Oak Brook, Ill.-based company continues to derive much of its momentum from its home market, where extended operating hours, cashless payments and new menu items have boosted sales at the nearly 14,000 U.S. restaurants.

“Profits surged at two of the nation’s largest railroads in the fourth quarter, as a growing economy increased demand to move everything from coal to consumer goods.

Burlington Northern Santa Fe Corp., the nation’s second largest railroad company, said Tuesday its fourth-quarter earnings rose 24 percent. CSX Corp., the largest rail operator in the eastern United States, said profits more than tripled from a year ago, a jump magnified by a year-ago loss from a business the company has since sold.

Demand was so strong that both companies were able to push rates up in the fourth quarter, allowing them to overcome the high cost of fueling their locomotives.

Burlington Northern’s chairman and chief executive, Matthew K. Rose, said the demand for railfreight service was unprecedented.

Burlington Northern shares rose $3.17, or 4.4 percent, to close at $74.80 on the New York Stock Exchange, after hitting a new 52-week high of $76.12 earlier Tuesday. But CSX, which fell short of revenue forecasts despite its big jump in profit, saw its shares fall $1.63, or 3.1 percent, to close at $50.75 on the NYSE.

“Financial-services holding company Safeco Corp. said Tuesday its fourth-quarter earnings rose after all of its businesses produced underwriting profits.

Seattle-based Safeco’s net income increased to $190.7 million, or $1.53 a share, from $179.8 million, or $1.41 a share, in the prior fourth quarter.

Analysts surveyed by Thomson Financial had forecast, on average, earnings of $1.28 a share.

Total revenue increased slightly to $1.59 billion from $1.57 billion.

“Blaming hurricanes and higher costs for raw materials, chemical maker DuPont Co. reported a 45 percent drop in fourth-quarter earnings Tuesday and predicted a decline in first-quarter earnings as well.

Shares of Wilmington-based DuPont fell 29 cents to close at $39.26 Tuesday on the New York Stock Exchange.

DuPont earned $153 million, or 16 cents per share, in the quarter, down from $278 million, or 28 cents per share, in the fourth quarter of 2004. Excluding certain items, the company would have earned 13 cents per share. The adjusted figure is three cents higher than the 10 cents per share predicted by DuPont on Jan. 11.

“Health care conglomerate Johnson & Johnson posted a 79 percent increase in fourth-quarter profit Tuesday, mainly due to lower overhead costs and a large tax charge a year ago.

While the earnings were in line with Wall Street expectations, revenue was below estimates, with domestic pharmaceutical sales down 10 percent. J&J shares fell nearly 3 percent.

The company said that net income totaled $2.2 billion, or 73 cents per share, for the three months ended Dec. 31 versus $1.2 billion, or 41 cents a share, a year ago.