McDonald's Earnings Dip On Higher Technology Costs

McDonald's reported a dip in third-quarter earnings on Tuesday, missing expectations as increased spending on technology hit the company's performance despite higher sales.

Profits dipped 1.8 percent from the year-ago period to $1.6 billion. Revenues edged up 1.1 percent to $5.4 billion.

The fast-food giant notched a healthy 5.9 percent increase in global comparable sales, including a solid rise in the United States. The company also cited Britain and France as strong markets.

But profits were pressured by increased spending in technology and research and development. McDonald's has invested heavily in home-delivery and mobile pay initiatives in recent years and in 2019 has unveiled a number of acquisitions to boost its drive-through operation.

In September, McDonald's announced the purchase of Apprente, a Silicon-Valley startup focused that builds voice-based systems for multi-accent and multi-item conversational ordering.

The technology is expected to speed McDonald's Drive Thru ordering process. The acquisition follows the April purchase of Dynamic Yield, a New York- and Tel Aviv-based company that has developed technology that varies menu displays based on time of day, weather and trending menu items.

Results were also hit by an impairment connected to the chain's purchase of a joint venture partner's interest in the India Delhi market.

Chief Executive Steve Easterbrook said the latest batch of results reflects the company's commitment "to embrace the culture of innovation that helped launch our company over 60 years ago."

Shares tumbled 3.5 percent to $202.62 in pre-market trading.