(Corrects to clarify revenue and revenue from constant currencies)
NEW YORK (Dow Jones) -- McDonald's Corp. turned in a 53% jump in fourth- quarter earnings Tuesday amid stronger sales and substantially lower costs.
The fast-food behemoth also said it will buy back a big chunk of its shares and is looking to open 800 new McDonald's restaurants - the largest number in more than three years.
Oak Brook, Ill.-based McDonald's(MCD)shares tracked marginally higher by $ 35.93, up 22 cents, in recent dealings, after hitting $36.31 earlier in the session, its highest level in more than a year.
For the quarter, McDonald's said it made $608.5 million, or 48 cents a share, compared with $397.9 million, or 31 cents, earned in the year-earlier quarter.
The results were pre-reported last week. Analysts, on average, had been expecting a profit of 48 cents a share, according to Thomson First Call.
Revenue rose 4% to $5.23 billion, driven by a 4.2% global comparable sales increase. Revenue rose 6% in constant currencies. Analysts polled by Thomson First Call were expecting revenue of $5.21 billion.
McDonald's said results were helped by strength in the U.S. and by such initiatives as menu additions, extended operating hours and cashless payment options. A rebound of sorts in Europe also was a big contributor to the sales gains.
However, operating income in the quarter surged 52% amid a 92% drop in impairment and other charges as well as a 48% decrease in other operating expenses.
Those were partially offset by a 12% increase in selling and general administration costs.
The Oak Brook, Ill.-based company backed its average annual long-term growth targets calling for system-wide sales and revenue growth of 3% to 5%, annual operating income growth of 6% to 7%, and annual returns on incremental invested capital at a rate in the high teens.
The company also said it plans to buy back about $1 billion worth of shares during the first quarter.
Moreover, McDonald's said it plans to invest $1.8 billion of capital this year primarily related to opening 800 new McDonald's restaurants and its "reimaging" efforts around the globe to keep the brand relevant.
Though McDonald's has vastly improved sales, menu choices and operations while giving back shareholders record dividends in the last three years, it is still facing investor pressure to drum up more shareholder value.
William Ackman last week encouraged the company to separate about 20% of its company-owned restaurants into a separately traded company.
McDonald's said no to the proposal and is expected to talk about its plans to hike sales at those restaurants during its quarterly conference call Tuesday morning.
(END) Dow Jones Newswires
01-24-061430ET
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