UPDATE: McDonald's Posts Downbeat Q2 Profit, Shares Fall

McDonald's

reported weaker-than-expected profit for the second quarter. McDonald's posted a quarterly profit of $1.39 billion, or $1.40 per share, versus a year-ago profit of $1.4 billion, or $1.38 per share. Its revenue gained 1% to $7.18 billion. However, analysts were projecting earnings of $1.44 per share on revenue of $7.29 billion. McDonald's global sales at restaurants open more than a year were relatively flat, versus analysts' expectations for a 0.8% growth. Its same-store sales in the US dropped 1.5%, versus estimates of a 0.3% drop. Same-store sales in Europe declined 1%, while same-store sales in the Asia/Pacific, Middle East and Africa region gained 1.1%. Its same-store sales also dropped 2.5% in June. McDonald's President and Chief Executive Officer Don Thompson said, "Overall, 2014 is a year of strengthening the foundational elements of our business that are critical to enabling and advancing our longer-term strategies. Heading into 2014, we acknowledged that we did not expect any material changes to the operating environment this year. As such, full year 2014 global comparable sales are expected to be relatively similar to year-to-date June performance, with July global comparable sales expected to be negative. While near-term results are expected to remain muted, sizable growth opportunities remain, and we are committed to pursuing these opportunities through continuous improvement in everything we do - from the food we serve, to our engagement with our customers, to the management of our financial resources." McDonald's shares fell 1.79% to $95.80 in pre-market trading.