McD posts second-ever quarterly loss on one-time charges

OAK BROOK Ill. As expected from its pre-release last week, McDonald’s Corp. posted its second-ever quarterly net loss on Tuesday, the result of a one-time charge of $1.6 billion for the sale of 1,600 restaurants and development licenses in Latin America and the Caribbean.

That divesture, announced in April, was considered by many analysts to be a positive step for the largest burger chain, as it would move the risk and expense of operating and developing restaurants from the Oak Brook, Ill.-based company to the purchasing licensee. 

Still, the transaction led to a loss of $711.7 million, or 60 cents per share, for the second quarter ended June 3, compared with a year-earlier profit of $834.1 million, or 67 cents a share. The company’s first net loss occurred in the fourth quarter of 2002, and was blamed on a lingering sales slump.

Excluding the impact of the Latin America transaction, McDonald’s reported a 25-percent jump in earnings from continuing operations, to $1.4 billion, or 71 cents a share, from $1.1 billion, or 56 cents a share a year ago.

As previously reported, McDonald’s top line continued to surge on the chain’s breakfast business, new items like the Snack Wrap and premium coffee offerings, the company reported. Second-quarter revenue increased 12 percent to $6.01 billion, driven by a global same-store sales increase of 7.4 percent.

During the company’s quarterly conference call, Matthew Paull, chief financial officer, announced plans to retire by year-end to pursue a longtime goal of teaching on a college campus. A search for his replacement is in progress, he said.