5.3% profit drop for McDonald’s

McDONALD’S said second-quarter profit fell 5.3% because of an increase in advertising spending that helped boost sales in the US for the third month in a row.

Net income dropped to $470.9 million, or 37 cents a share, from $497.5 million or 39 cents, in the year-earlier period, the Oak Brook, Illinois-based company said in a statement. Revenue rose 11% to $4.28 billion, helped by currency gains.

Demand for new salads with Newman’s Own dressings helped US sales at restaurants open at least 13 months rise 4.9% in the quarter, ending a more than one-year decline.

Shares have surged 32% this year, making it the sixth-biggest gainer among the 30 companies in the Dow Jones Industrial Average. It fell 18 cents to $21.26 yesterday in New York Stock Exchange composite trading. The stock tumbled 39% in 2002 amid customer complaints about unappealing food, poor service and dirty restaurants. James Cantalupo, who retired in 2001 as vice chairman and president after 28 years at McDonald’s, returned in January to replace Jack Greenberg.