Oct. 23, 2002
NEW YORK -- McDonald's Corp. posted lower earnings for the seventh time in eight quarters, but its shares still rose in reaction to its plan to cut new restaurant openings and increase spending on existing outlets, according to a Reuters report.
With the help of a one-cent dividend increase, McDonald's stock rose 65 cents to $18.95 on Oct. 22 for its biggest one-day gain on the New York Stock Exchange in at least two years.
Part of the chain's strategy is cutting back on the number of new burger outlets -- with plans for only about 600 hamburger restaurants worldwide in 2003, sharply down from a high of about 2,000 in 1996.
While cutting back on its traditional restaurants, however, McDonald's said it intends to expand its non-burger chains such as Donatos Pizza, Chipotle, Pret A Manger and Boston Market.
McDonald's said it would add about 90 non-hamburger outlets this year, and between 150 and 175 in 2003. The company operated 1,077 non-hamburger restaurants at the end of the third quarter.
It plans to cut the amount of capital spending on new restaurants next year by nearly $500 million, or about 40 percent.
McDonald's reported net income of $486.7 million in the third quarter, compared with $545.5 million a year earlier.