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McDonald’s sales growth breaches 2019 levels

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By Nivedita Balu and Hilary Russ

(Reuters) – McDonald’s Corp on Thursday beat Wall Street estimates for comparable sales, and said it returned to pre-pandemic levels of growth, driven by eased COVID-19 restrictions in some markets and U.S. customers, flush with stimulus cash, craving new chicken sandwiches and nuggets.

First-quarter global comparable sales growth of 7.5% surpassed pre-pandemic 2019 levels, Chief Executive Officer Chris Kempczinski said. That trounced the 4.71% growth expected by analysts polled by Refinitiv IBES.

Shares rose 0.6% on the New York Stock Exchange after the opening bell.

The Chicago-based burger chain also raised its 2021 systemwide sales outlook to the mid-teens from the low double-digits.

An intense vaccination drive and the distribution of coronavirus relief checks encouraged more people in the United States to eat out.

“The stimulus checks are now wearing off generally, but we’re seeing continued momentum in our business,” Kempczinski said during a call with analysts.

Fast-food chains have managed to weather pandemic restrictions much better than others in the industry, given their drive-throughs, delivery networks and competitive pricing.

McDonald’s also rolled out its crispy chicken sandwiches earlier this year in the United States, looking to tap into a frenzy kicked off by privately owned Chick-fil-A and Restaurant Brands International Inc’s Popeyes in 2019. It also brought back spicy chicken nuggets.

Those factors, combined with celebrity marketing campaigns, helped power a 13.6% jump in sales at restaurants open for more than a year, trouncing expectations of 9.25%, according to the analysts.

Sales were driven in part by higher tabs, with traffic lower across all segments.

McDonald’s also showed strong growth in its international markets, with Britain, Australia and Canada recording a rise in sales.

However, COVID-19 resurgences in some markets led to volatility and new government restrictions, particularly in France and Germany.

The company said it had 40 million active users of its digital app in its top six markets – about half of them in the United States.

Net income rose to $1.54 billion, or $2.05 per share, for the first quarter, from $1.11 billion, or $1.47 per share, a year earlier.

Revenue increased 9% to $5.12 billion, above estimates of $5.03 billion.

Excluding onetime items, the company earned $1.92 per share, well above the expectation of $1.81.

 

(Reporting by Nivedita Balu in Bengaluru and Hilary Russ; Editing by Anil D’Silva, Steve Orlofsky and Jonathan Oatis)

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Colonial Pipeline hackers stole data on Thursday

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The hackers who caused Colonial Pipeline to shut down on Friday began their cyberattack against the top U.S. fuel pipeline operator a day earlier and stole a large amount of data, Bloomberg News reported citing people familiar with the matter.

The attackers are part of a cybercrime group called DarkSide and took nearly 100 gigabytes of data out of Colonial’s network in just two hours on Thursday, Bloomberg reported late Saturday, citing two people involved in the company’s investigation.

Colonial did not immediately reply to an email from Reuters seeking comment outside usual U.S. business hours.

Colonial Pipeline shut its entire network, the source of nearly half of the U.S. East Coast’s fuel supply, after a cyber attack that involved ransomware.

 

(Reporting by Aakriti Bhalla in Bengaluru; Editing by Himani Sarkar)

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TC Energy posts C$1 billion quarterly loss on Keystone XL suspension

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By Nia Williams and Shariq Khan

CALGARY, Alberta (Reuters) -TC Energy Corp swung to a loss in the first quarter, hit by C$2.2 billion ($1.81 billion) impairment charges related to the suspension of its Keystone XL project, the Canadian pipeline operator said on Friday.

The KXL pipeline was planned to carry 830,000 barrels per day of heavy crude across the border from Alberta to Nebraska, but U.S. President Joe Biden revoked a key permit for the project on his first day in office.

TC Energy said the impairment charge was related to halting work on KXL and a reassessment of related projects like the Heartland Pipeline.

“We were very disappointed with the decision in January to revoke the presidential permit,” Chief Executive Francois Poirier said on an earnings call, adding the company was “opportunity-rich” in other parts of its business.

Calgary-based TC Energy owns the largest network of natural gas pipelines in North America as well as the existing Keystone oil pipeline and power and storage assets.

The company posted a C$2.51 billion loss from its oil pipelines, of which Keystone is the biggest contributor, compared with a C$411 million profit in the same period last year.

It reported net loss attributable to shareholders of C$1.1 billion, or C$1.11 per share, in the three months ended March 31 compared with a profit of C$1.1 billion a year earlier.

Excluding items, the company earned C$1.16 per share, slightly better than analysts’ average estimate of C$1.10, according to Refinitiv IBES data.

TC Energy shares closed up 0.2% on the Toronto Stock Exchange at C$61.94.

($1 = 1.2176 Canadian dollars)

(Reporting by Shariq Khan in Bengaluru and Nia Williams in Calgary; Editing by Arun Koyyur and Marguerita Choy)

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Lion Electric says it will build new plant in Illinois, create 750 jobs

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By Tina Bellon

(Reuters) – Canadian electric vehicle company Lion Electric on Friday said it had selected Illinois as the location for its new U.S. manufacturing plant, promising to invest at least $70 million and create about 750 jobs over the next three years.

Lion, known for its electric yellow school buses, said it will build the 900,000 square foot facility in Joliet near Chicago to produce 20,000 electric buses and medium and heavy-duty trucks per year.

The company said it expected the facility to come online in the second half of 2022. Lion Chief Executive Marc Bedard said in an interview that while the Illinois factory would focus on vehicle manufacturing initially, the company might later add battery production. Lion is building a battery production facility in Canada.

Bedard said Lion is expanding in the United States when there is growing demand among school districts and companies to switch to electric transportation. Nearly 400 of the company’s electric school buses are on the road and Amazon.com Inc has said it will buy up to 2,500 trucks from Lion by 2025.

Lion’s expansion also coincides with a favorable regulatory environment under U.S. President Joe Biden, who has pushed for providing generous subsidies to the EV industry.

“We’re looking for regulatory tailwinds that will be favorable to electric,” Bedard said of his decision to build the factory in Illinois. State-funded tax credits for the plant were being negotiated, Lion said.

Lion on Friday also is expected to start trading publicly on the New York and Toronto stock exchanges following a merger with special purpose acquisition company Northern Genesis Acquisition Corp in November.

The deal was valued at $1.9 billion and Lion received nearly $500 million in net cash proceeds, the majority of which it said it plans to invest in battery technology and the new U.S. plant.

 

(This story corrects to show that investment and job creation is over a three year, not two year period in first paragraph)

 

(Reporting by Tina Bellon in Austin, Texas; editing by Grant McCool)

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