Fast food giant McDonald's today said its fourth-quarter earnings fell 7 per cent as an outbreak of mad cow disease in Europe pushed the region's sales down 10 per cent and threatened to weaken the company's first quarter results.
Net income at the Illinois-based hamburger maker, the largest restaurant company in the world, fell to $452 million, or 34 cents a share, from $486.2 million, or 35 cents a share, a year earlier. McDonald's was expected to earn 35 cents a share, according to a recent poll of analysts by First Call/Thomson Financial.
McDonald's, which operates nearly 5,500 restaurants in Europe, its second-largest market behind the United States, has since November seen sales erode amid an outbreak of mad cow disease, or bovine spongiform encephalopathy (BSE), on the continent.
CEO Mr Jack Greenberg said he expects a difficult first quarter of 2001 due to continued mad cow concerns, tough comparisons from last year, and an extra trading day in 2000.
"We expect the first quarter to be very challenging, due to outstanding results and an extra trading day in 2000, and continuing consumer confidence issues about European beef," he said.
Shares of McDonald's fell 3.4 per cent or $1-1/8 to $31-3/4 in early New York Stock Exchange trading, off a 52-week high of $41-7/16. In the past year, the shares have under-performed the Dow Jones Industrial Average by about 15 per cent.
Reuters