Earnings roundup: McDonald’s profits up 22 percent

McDonald’s Corp. extended its hot streak to four years with a 22 percent jump in first-quarter earnings, and also said Friday it will sell nearly 1,600 restaurants in Latin America and the Caribbean to a franchisee — a gain it pledged to return to shareholders.

The announcement sent the fast-food leader’s shares briefly to an all-time high of $49.70 before they dipped in profit-taking. The once-stagnant stock has quadrupled since falling to $12.12 in March 2003.

The planned transaction involving restaurants in 18 countries will result in a non-cash impairment charge of $1.6 billion in the second quarter. But it reduces the company’s financial exposure in a challenging region and will net McDonald’s about $700 million in cash, which it said will be used to increase share buybacks and dividends.

Analysts hailed the sale, which had been expected as McDonald’s pares the number of company-owned restaurants worldwide, and said they saw no signs the company’s resurgence is running out of steam.

Boosted by surging sales in Europe and strong demand for its changing U.S. menu, McDonald’s is “firing on all cylinders,” Goldman Sachs analyst Steven Kron said in a note to investors.

Shares in the Oak Brook, Ill.-based company fell 43 cents to close at $48.35 on the New York Stock Exchange, remaining up more than 50 percent since last June.

Profit for the first three months of the year was $762 million, or 62 cents per share, matching its April 13 estimate. That was up from $625 million, or 49 cents per share, in the same period a year ago.

Revenue rose 11 percent to $5.46 billion from $4.91 billion.

“Caterpillar Inc. shares surged more than 4 percent Friday as the world’s largest construction equipment maker posted better-than-expected profit despite a weak U.S. home building market and a sharp decline in engine sales.

Net earnings dipped 3 percent to $816 million, from a record $840 million in the January-to-March period a year ago. But strong overseas sales nearly offset expected declines in North America that Wall Street had predicted would cut more deeply into profit.

Caterpillar also boosted its earnings forecast for the year Friday, helping send its shares up $3.20, or 4.7 percent, to close at $71.82 on the New York Stock Exchange.

“Pfizer Inc., the world’s largest drug maker, said Friday its profit fell 17.5 percent in the first quarter, hurt by one-time charges and disappointing sales of diabetes drug Exubera. Adjusted results beat Wall Street expectations by a wide margin.

Net income fell to $3.39 billion, or 48 cents per share, from $4.11 billion, or 56 cents per share, a year ago. Excluding one-time items, the company reported adjusted profit of $4.8 billion, or 68 cents per share, up from $4.35 billion, or 59 cents per share, last year. Pfizer, which early in the quarter announced it would trim its work force by 10 percent, reported restructuring costs of $812 million, up from $299 million a year ago.

Revenue rose 6 percent to $12.47 billion from $11.75 billion last year.

“Xerox profits jumped nearly 17 percent in the first quarter of the year to $233 million, the company announced Friday, on the strength of solid revenue gains and cost-cutting measures.

Earnings per share were 24 cents, up from 20 cents in the first quarter of 2006. Analysts polled by Thomson Financial predicted profit of 20 cents per share.

Revenue was up by 4 percent, to $3.8 billion, a reversal from a 2 percent loss in the same quarter last year.

“Diversified industrial conglomerate Honeywell International Inc. said Friday first-quarter earnings jumped 21 percent as sales and profits rose across all segments.

For the three months ended March 31, Honeywell reported net income of $526 million, or 66 cents per share, compared to $436 million, or 52 cents per share, for the same period last year.

The results exceeded Wall Street expectations of 62 cents a share in profit and $7.7 billion in sales.