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Thursday, October 19, 2006

The Hamburger And Coke Economy. (MCD)(SBUX)(KO)(PEP)

You can't sell a house or a car these days. But, hamburgers and Coke are flying off the shelves.

McDonald's, as expected, announced blockbuster earnings. Third quarter profits rose 15% at McDonald's with a significant contribution from better sales in the US. Net income hit $843 million. The company's new snack-sized chicken wrap, which costs a couple of dollars, was a big winner.

Over at Coke, net profit rose 14% (sort of close to the MCD number) to $1.46 billion. Coke said it carbonated beverage sales had not been so good since 2000.

Don't forget Starbuck's which also had a good quarter and a September same-store sales increase of 6%.

24/7 has published an analysis of this trend before. But, it would appear that the new from McDonald's, Coke, and Pepsi tend to support it.

Sometimes the team that plays "small ball" in baseball, banging out singles, beats the team with the home run hitters. For now, the 2006 economic season looks that way.

Douglas A. McIntyre can be reached at He does not own shares in companies that he writes about.

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