McDonald's and Coca Cola see profits fall sharply
- 21 October 2014
- From the section Business
Two US food and drink titans have posted sharply lower profits for the July-to-September quarter.
McDonald's saw earnings fall 30%, while Coca-Cola's fell 14%, with both citing lower US sales as key reasons.
The fast-food chain's profits of $1.07bn (£661m) were also hit by a food scandal in China, contributing to a 4.6% fall in revenues to $6.99bn.
Meanwhile, the world's largest drinks group made a $2.1bn profit on revenues that were broadly flat at $11.9bn.
McDonald's US sales have been under pressure as consumers switch to other chains, notably the fast-growing Chipotle Mexican Grill.
Sales also fell in Russia, Germany and especially in China, where McDonald's was hurt by a scandal over meat supplies.
Chief executive Don Thompson admitted that the trading performance was not good enough. "McDonald's third-quarter results reflect a significant decline versus a year ago," he said.
"By all measures, our performance fell short of our expectations."
Meanwhile, Coca Cola said that its US sales were down 1% during the quarter. Consumers are increasingly turning to alternatives to sweet, fizzy drinks. The company's profits also suffered because of currency fluctuations and strengthening of the dollar.
In August, Coke spent $2.15bn for a 16.7% stake in Monster Beverage energy drinks business.
As part of the deal, Coke transferred ownership of its own, less successful energy drinks, including brands NOS, Full Throttle and Burn, to Monster.
And it took over Monster's non-energy brands such as Hansen's Natural Sodas, Peace Tea and Hubert's Lemonade.