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McDonald's Unveils Unexpectedly Strong Earnings Report

AUDIE CORNISH, HOST:

There are some signs that the long-running turnaround effort at McDonald's may be working. The company announced today that it beat fourth-quarter profit estimates and that sales increased both at home and abroad. NPR's Yuki Noguchi reports.

YUKI NOGUCHI, BYLINE: The company that made its name on cheap burgers and fries is feeling a nascent turnaround with breakfast sales. Last fall, the chain announced it would offer its egg sandwiches and pancakes all day, a move that appears to have drawn customers back in. Steve Easterbrook took over as CEO amid the turmoil last year.

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STEVE EASTERBROOK: All-day breakfast positions us to regain market share we've given up in recent years.

NOGUCHI: Easterbrook spoke with analysts in a conference call this morning. The company has faced a number of problems - a cumbersome menu, slow service and poor food quality. Last year, the company announced it would minimize the use of chickens treated with antibiotics, taking a cue from some of McDonald's more upscale competition. Easterbrook says it has also made progress with its service. It's investing in what it calls the experience of the future in some McDonald's stores, which use digital ordering systems.

EASTERBROOK: These restaurants offer modern in-store service platforms such as self-order kiosks, digital merchandising and customized order pickup.

NOGUCHI: Jason Moser is an analyst with The Motley Fool. He says it appears McDonald's is winning back some customers from similar fast food chains. Moser says the big question now is whether McDonald's will be able to sustain its momentum, especially in the battle for breakfast customers.

JASON MOSER: There's a lot of competition out there in the form of restaurants like Starbucks and Panera, which are doing their own sorts of initiatives in order to try to bring more customers in.

NOGUCHI: McDonald's reported fourth-quarter profits of $1.2 billion on revenue of more than $6.3 billion. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.