McDonald's key revenue metric rises in August

OAK BROOK, Ill. — McDonald's Corp. said Tuesday that a key revenue figure rose 1.9 percent in August, driven by a strong performance in Europe. Its Monopoly promotion in the United States helped lift its performance there.

The world's biggest hamburger chain reported the gain in revenue at restaurants open at least 13 months for the period ended Aug. 31. That includes a 3.3 percent increase in Europe, a 0.2 percent rise in the U.S. and a 0.5 percent decline in Asia Pacific.

This figure is a key gauge of a restaurant operator's health because it excludes results from restaurants recently opened or closed.

The monthly sales figure is a snapshot of the money spent on food at company-owned and franchised locations and does not reflect corporate revenue.

While the metric improved for McDonald's in August, it was slower growth than the 3.7 percent increase in the prior-year period. But it was faster growth than the 0.7 percent increase in July.

The company, based in Oak Brook, Ill., is trying to navigate a variety of challenges and has already said it expects the rest of this year to be challenging. To start, McDonald's is facing intensifying competition from long-time rivals Burger King and Wendy's, which have been revamping their menus and stepping up marketing.

In addition, McDonald's is trying to keep up with changing tastes by offering items people feel are fresher or healthier, such as its new chicken wraps and egg white breakfast sandwiches. But the chain has also been aggressively promoting its Dollar Menu and other deals at a time when it says people are being more careful about spending.

And it said Tuesday it has begun offering steak as an option for all breakfast sandwiches, including the McMuffin and biscuit or bagel breakfast sandwiches. The "steak on any" option has been rolling out to 9,600 McDonald's restaurants in August and September.

Analysts have expressed concern that the latter strategy could eat into profit margins. But last week, the chain said it was exploring a revamped Dollar Menu that includes items costing as much as $5 that could go national this year.

McDonald's, which has more than 34,000 locations globally, is also trying to remind people of longtime favorites and has been featuring its Big Mac in TV and online ads. It also recently expanded its lineup of Quarter Pounders, saying it wanted to capitalize on the popularity of the burger.

The 3.3 percent increase in Europe of revenue at restaurants open at least 13 months was led by the U.K., France and Russia. McDonald's said that the U.K. responded well to new blended-ice drinks. The chain anticipates trying to build demand through limited-time offerings.

In the U.S., the metric edged up 0.2 percent, down significantly from the 3 percent rise a year ago. McDonald's said it plans on strengthening its U.S. presentation with new products across its various menus and at different price points.

The metric fell 0.5 percent for the Asia Pacific region, Middle East and Africa on softness in Japan, China and Australia. The Oak Brook, Ill., company said that it faced a tough prior-year comparison, when the figure climbed 5.7 percent.

McDonald's shares rose 83 cents to $97.28 in premarket trading Tuesday about a half-hour ahead of the market opening.

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Bangladesh's Grameenphone to invest in 3G

DHAKA, Bangladesh — The head of Bangladesh's largest mobile phone company said Tuesday it is ready to invest millions of dollars to prepare for 3G operations after gaining spectrum in the country's first open 3G auction.

On Sunday, Grameenphone Ltd. won 10 megahertz of spectrum with a bid of $21 million for each megahertz.

Three other private companies — Banglalink, the local subsidiary of Egypt's Orascom Telecom; Robi, a joint venture between Malaysia's Axiata Group and Japan's NTT DoCoMo; and Airtel, majority-owned by India's Bharti Airtel — also won bids for 5 megahertz of spectrum each at a price of $105 million.

State-owned Teletalk, which began 3G operations on an experimental basis last year, will also pay $210 million for 10 megahertz of spectrum.

Grameenphone, a subsidiary of Norwegian telecom giant Telenor ASA, has 44 million subscribers and a 42 percent market share. Telenor owns 55.8 percent of Grameenphone, with Grameen Telecom owning 34.2 percent.

Since 1997, when Grameenphone started its operations in Bangladesh, it has invested more than $2.5 billion.

Vivek Sood, Grameenphone's chief executive officer, said in an interview that it was an "exciting moment" to offer third-generation mobile telecom service in Bangladesh, which has a population of 160 million.

The company is eyeing Bangladesh's largely untapped Internet market because 3G can offer relatively high-speed Internet data transfer. Although the country has almost 107 million cellphone users, the number of Internet users is less than 40,000.

"I am pleased with the outcome of the auction," he said. "Now it's the time to start our journey. Definitely we are on the competitive edge."

Last month, the International Finance Corp., the private sector arm of the World Bank, helped raise a $345 million loan for Grameenphone through a consortium to increase its network capacity and build more infrastructure in rural Bangladesh.

"We have a vision of Internet for all, we are moving forward with a massive plan," he said. "There are options for providing e-education, mobile health services through use of 3G."

"This is the way we are looking at our plans for 3G."

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Carmakers upbeat at Frankfurt as market steadies

FRANKFURT, Germany — The world's auto manufacturers are moving on from turbulent times — without help from Europe's lagging car markets.

Recovering auto sales in the United States and continuing strength in China have helped lighten the mood at this year's Frankfurt Auto Show, where automakers have set out to wow potential customers with electric and hybrid-drive vehicles and the latest technology.

Latest sales figures show the key U.S. market on pace for 16 million in sales this year, finally reaching the 2007 level from before the financial crisis and recession.

But the only good news out of the show's home market, Europe, is that sales appear to be halting their steep decline. Executives and analysts say no significant rebound is expected this year or next.

"Europe remains a challenge," BMW CEO Norbert Reithofer told journalists. The U.S, on the other hand, "is not the 17 million that we had before, but it's still up."

Last year, new car registrations in the European Union were at their lowest level since 1995 at around 12 million cars, compared to 15.6 million in in 2007. The Center for Automotive Research at the University of Essen-Duisburg estimates only 11.8 milion this year, and a very slight recovery in 2014.

"In the car industry, we have two worlds, on the one hand Europe which is a catastrophe, and the rest of the world where it looks much better," said Ferdinand Dudenhoeffer, professor of automotive economics at the university.

Germany's Daimler, Volkswagen and BMW are all making money thanks to sales outside Europe and are showing off new products with swagger and glitz at their home show.

Major themes at Frankfurt include electric and hybrid autos, often in higher performance and price categories, and new small SUVs, an increasingly popular category in Europe. Another frequent topic is autonomous driving — still a long way off due to legal reasons but increasingly technologically possible by equipping cars with cameras and computers.

At BMW's gigantic hall, its new i3 electric compacts glided silently around an elevated figure-eight track. Across the way, Daimler's CEO Dieter Zetsche showed off his Mercedes brand's self-drive technology by riding into another exhibit hall in the back seat of a driverless car.

The car had made an autonomous cruise through several German towns to show off the new systems. Drivers who buy the new Mercedes S-Class will find that it forces them to put their hands back on the wheel after a few seconds. The company also unveiled a hybrid version of the S-Class.

Volkswagen showed off four new cars using electric propulsion: electric versions of its Up! and Golf compacts, and an Audi A3 and Porsche Panamera using hybrid drive, which combines electric motors and internal combustion engine to reduce emissions.

One target of the show's marketing effort is western Europe's young people, many of whom have turned away from their parents' SUV's toward a mix of bicycles, car-sharing and public transport.

BMW opened the first press day Tuesday with a song shouting "we are young" and a presentation including footage of people tearing down the Berlin Wall.

With hybrids and electrics only 0.2 percent of the market, analysts say that the prospects for sales and profits remain uncertain. They can help companies meet government requirements for lower average emissions — and position them to be ready if such vehicles take off.

Zetsche of Mercedes added that the only way to perfect the technology is to actually make cars on an industrial scale and sell them.

"We don't expect that this will have any kind of explosive development," Zetsche told reporters. "But we will see a long phase of steady, slow substitution of conventional power trends by alternative ones."

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Nokia, Mercedes-Benz in smart map deal

HELSINKI — Nokia Corp. says it has teamed up with Daimler AG's Mercedes-Benz car division to jointly build and develop digital smart maps for conventional and self-driving cars.

Under Wednesday's deal, Nokia's HERE mapping and location services unit and Mercedes will initially provide 3D maps for the Mannheim to Pforzheim route in Germany for cars connected to a computing cloud. The system will be later augmented to include autonomous vehicles.

Nokia says connecting a car to a cloud is "one of the biggest opportunities for the automotive industry today". No financial value of the agreement was disclosed.

Nokia's mapping unit is one of the three businesses that will remain in the company following last week's announcement to sell its mobile phone business to Microsoft.

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FDA: Roche drug works in early stage breast cancer

WASHINGTON — The Food and Drug Administration has issued a positive review of a breast cancer drug from Roche that could become the first pharmaceutical option for treating the earliest stages of the disease.

In documents posted online, FDA scientists say women who received the drug Perjeta had significantly fewer tumors than women who received older drug combinations.

The results are unusual because the drug was used prior to surgery to remove the tumors.

Based on the findings, FDA scientists recommend accelerating approval of the drug. That step is reserved for groundbreaking treatments for deadly diseases.

Perjeta was approved last summer to treat aggressive breast cancer that has spread to other parts of the body. But Roche now seeks approval to use the drug at a much earlier stage of the disease.

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Options favor driver near end of leased low-mileage car

I leased a new Scion xD for 36 months, and the lease ends in November. The value of the vehicle at the beginning of the lease was listed as $16,700. The purchase option at the end of the lease is $10,296. My problem is that I currently have just 10,840 miles on the car and don't see any big trips in the future. Is there such a thing as a rebate on unused mileage? What are my options?

How about a round-trip vacation? Alaska to California to Florida to Maine and home. A nice long drive would use up some of those miles, but you'd still have miles to spare on the lease.

I'm not aware of any mileage rebates on unused lease miles for passenger cars, but you do have several viable options. My son Ryan, who sells cars for a Chrysler dealership, suggests that you call the leasing company to confirm the precise purchase option price. Then stop by a new-car dealership and ask them to appraise the vehicle to determine how much equity you have at this point. If you have positive equity in the vehicle — meaning it's worth more than the lease purchase price because of the low mileage — you could either sell or trade it to a new car dealer.

So, your options are to turn the vehicle in at the end of the lease, purchase the vehicle from the leasing company and keep it or sell it to a private party, or sell or trade the vehicle at a dealership. Compare your options and then make your decision. Buying and keeping the car would be the simplest answer, but the selling or trading at a dealership might make the most economic sense.

My boyfriend needs help with electrical issues on his 2006 Cadillac CTS.

When he turned on the wipers he lost the turn signals, hazards, headlight control and trunk release. Sometimes there is a "hood open" warning as well as a "door open" warning — but they are not open.

Electrical gremlins can be very difficult to pinpoint. In this case, start with a scan tool to identify any fault codes and then focus on the connections and grounds for those components, systems and modules involved. "Fretting" is a form of corrosion that appears like dark smudges or spots on the individual pins, and it can cause intermittent connections in connectors and terminals. Disassemble suspect connectors to clean and treat with dielectric grease to reseal the connection.

I have a 1991 Pontiac Sunbird LE with a 3.1-liter V6 engine and 62,000 miles in excellent condition. However, when I'm driving, the oil pressure gauge registers way above the high mark, which is shown as 80. When it's idling, it's about halfway back down. It uses no oil and appears to run well. Should I be concerned about the erroneous oil pressure reading? What's causing it?

Assuming you've driven the vehicle in this condition for a number of miles and nothing catastrophic has occurred, I suspect you're seeing an electrical issue with the oil pressure sending unit or possibly the oil pressure gauge itself. A quick test with the engine off is to find and disconnect the connector to the oil pressure sending unit on the front side of the engine. Turn the ignition switch on and watch the oil pressure gauge. It should move all the way in one direction.

Then ground the connection — the gauge should move all the way in the other direction. If the oil pressure gauge is the only instrument giving a false reading, chances are it's the sending unit.

The only mechanical issue that could generate extreme oil pressure would be a restriction on oil flow due to plugged oil passages for the cam bearings or valve gear. If it were a mechanical issue, I'd think you'd know by now.

Paul Brand is on vacation; this column was originally published on June 15, 2012. Paul Brand is an automotive troubleshooter, driving instructor and former race-car driver. Readers may write to him at Star Tribune, 425 Portland Ave. S., Minneapolis, Minn., 55488 or via email at paulbrand@startribune.com.

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It's a hit out of the park

Three years after breaking into baseball by signing Red Sox second baseman Dustin Pedroia to its first Major League Baseball endorsement deal, New Balance is looking to expand its presence by taking a swing at younger players and professional leagues in Japan and South Korea.

The Boston athletic shoe and clothing company now has 450 MLB players wearing its cleats, with 260 under formal contracts, including C.J. Wilson, Curtis Granderson, Miguel Cabrera, Jose Bautista and Evan Longoria, who turned to New Balance this year for a special cleat to accommodate his plantar fasciitis. Its baseball cleats and performance clothing also are sold by specialty baseball retailers such as Eastbay and at 160 Dick's Sporting Goods.

Revenue from baseball products still accounts for only a small percentage of New Balance's $2.39 billion in annual sales — cleated footwear is the lowest-margin footwear in the business — but the company banks on the "halo effect" that those sales will have in generating brand allegiance, according to Mark Cavanaugh, general manager of team sports and sports marketing.

New Balance's "Young Guns" campaign will target baseball players under the age of 25.

"Oftentimes, brands will wait to see if younger players become established in the game instead of taking a gamble on a kid who might be drafted or is in the minors," Cavanaugh said.

Its global attack will focus on Japanese and Korean MLB players — it signed Los Angeles Dodgers pitcher Hyun-jin Ryu this spring — and Nippon Professional Baseball and Korean Professional Baseball players.

New Balance opted to break into professional baseball because of its low cost of entry compared to other pro sports, according to Cavanaugh. And the company, which was known as a running brand, recognized it had to get into endorsement deals to establish a meaningful presence on the field.

The brand prides itself on judging a player's character as a criteria for endorsement deals more than other brands, according to Cavanaugh.

"We literally say no to guys," he said, noting three undisclosed players were dropped for issues such as driving under the influence and domestic assault.

Giving back to charitable and community organizations also is a condition of the athletes' contracts. Given what's been happening in New England sports of late, "it's a unique angle," Cavanaugh said. "I think it's the path that more people are going to be telling their athletes that they have to take."

Pedroia typifies that largesse, according to 
Cavanaugh: "He's one of the best examples of someone who lets actions speak louder than words."

But New Balance entered the game at an inopportune time — at least fashion-wise — as the trend of players wearing long baggy pants on the field came into vogue. "We get on guys when you can't see (our cleats) and give them a warning," Cavanaugh said. "We say, 'Dude, you've got to pull the pants up.' "

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For home short-sellers, finally comes some good news

WASHINGTON — Policy changes by two of the biggest mortgage market players could open doors to home buys this fall by thousands hard-hit by the housing bust and who thought they'd have to wait for years before owning again.

Fannie Mae, the federally controlled mortgage investor, has come up with a "fix" designed to help the many consumers whose short sales were misidentified as foreclosures by credit bureaus. Under previous rules, short-sellers would have to wait for up to seven years before becoming eligible for a new mortgage. Under the revised plan, they may be able to qualify for a mortgage in as little as two years. 
Homeowners who are foreclosed upon often must still wait for up to seven years before becoming eligible again to finance a house through Fannie. Industry estimates suggest that more than 2 million short-sellers might be affected by inaccurate descriptions of their transactions.

Meanwhile, the Federal Housing Administration (FHA) has announced a new program allowing borrowers whose previous mortgage troubles were caused by "extenuating circumstances" beyond their control to obtain new mortgages in as little as a year after losing their homes instead of the current three years. They will need to show that their delinquency problem was caused by a 
20 percent or greater drop in income that continued for at least six months, and that they are now back to work, paying bills on time and earning enough to qualify for a new FHA-insured mortgage.

Fannie's policy change came after months of prodding by the federal Consumer Financial Protection Bureau, U.S. Sen. Bill Nelson (D-Fla), the National Consumer Reporting Association, the National Association of Realtors and Pam Marron, an outspoken Florida consumer advocate. They all sought fairer treatment of borrowers who had participated in short sales in recent years.

In a short sale, the lender approves the sale of a house to a new buyer but typically receives less than the balance owed. In a foreclosure, the bank takes title to the property and seeks to recover whatever it can through a resale. Though the two types of transactions are distinct and involve significantly different losses for banks, with foreclosures usually far more costly, credit bureaus have no special reporting code to ID short sales. As a result, say critics, millions of people who have undertaken short sales in recent years may have their transactions coded as foreclosures on their credit bureau reports.

That matters — a lot — because Fannie Mae and other major financing sources have mandated different waiting periods for new loans to borrowers who have completed short sales compared with borrowers who were foreclosed upon — in this case, two years versus seven. Under the new policy in effect Nov. 16, short-sellers who find that their transactions were miscoded on credit reports and are able to put 
20 percent down, should alert their loan officers and provide transaction documentation. The loan officer should advise Fannie about the coding error. Fannie will then run the loan application through its revised automated underwriting system.

Freddie Mac, the other government-administered mortgage investor, continues to require a four-year waiting period for short-sellers who cannot demonstrate "extenuating circumstances" as having caused their problems. If they can do so — documenting income reductions beyond their control that wrecked their credit — they may be able to qualify for a new Freddie Mac loan in two years.

FHA's policy change may prove to be an even more generous deal for some previous homeowners. Like Freddie Mac, FHA wants to see hard evidence of what economic events beyond the borrowers' control — loss of a job, serious illness or death of a wage earner, for example — led to the delinquency or loss of the house. Applicants must be able to show 12 months of solid credit behavior, participate in a housing counseling program and get through the agency's underwriting hoops. But unlike either Fannie or Freddie, if you qualify under FHA's revised rules, which are now in effect, and your lender approves, you might be able to buy a house with a new, low-down-payment mortgage in as little as a year.

It's worth checking out.

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Breast milk pump born from desire for privacy

Necessity is the mother of invention, they say. So when Susan Thompson found she needed time to pump breast milk when she returned to work five months after her son Keegan was born, she just reinvented the breast pump.

Thompson headed back to the lab at Johns Hopkins University in late 2011 to finish her Ph.D. thesis on cellular interactions in the heart. But she struggled to incorporate pumping milk several times a day into her work schedule.

"You need complete privacy, and it takes a long time, so I was very unhappy with the whole process," Thompson said.

She and her husband, an engineer, were on their way to a ski resort when they began discussing ways to mimic using her hand to pump milk. The best way, they decided, was to consider the way a blood-pressure cuff compresses when inflated. What emerged was the Gala Pump, a doughnut-sized device that can be worn inside the bra, allowing a woman to discreetly pump milk anytime, anywhere.

"We wanted to keep the technology as easy and cost-efficient as possible," Thompson said. "Instead of a vacuum-powered suction pump, we created a massaging-based compression pump."

Using $20,000 from competitions and grants, the couple developed a prototype and entered MassChallenge, the $1.3-million startup competition. In May, they learned their newly incorporated company, DS Labs, was among 128 finalists in a field of more than 1,200 applicants.

"It was challenging to leave Johns Hopkins and all the resources there," Thompson said. "But MassChallenge has helped connect me with mentors who have a wealth of knowledge."

Recently, Thompson received permission to test the patent-pending Gala on other nursing mothers. If all goes well, she hopes to get Food and Drug Administration clearance to sell it on the market for about $250 as the nation's only wearable breast pump.

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Report: NSA can access most smartphone data

BERLIN — The U.S. National Security Agency is able to crack protective measures on iPhones, BlackBerry and Android devices, giving it access to users' data on all major smartphones, according to a report Sunday in German news weekly Der Spiegel.

The magazine cited internal documents from the NSA and its British counterpart GCHQ in which the agencies describe setting up dedicated teams for each type of phone as part of their effort to gather intelligence on potential threats such as terrorists.

The data obtained this way includes contacts, call lists, SMS traffic, notes and location information, Der Spiegel reported. The documents don't indicate that the NSA is conducting mass surveillance of phone users but rather that these techniques are used to eavesdrop on specific individuals, the magazine said.

The article doesn't explain how the magazine obtained the documents, which are described as "secret." But one of its authors is Laura Poitras, an American filmmaker with close contacts to NSA leaker Edward Snowden who has published several articles about the NSA in Der Spiegel in recent weeks.

The documents outline how, starting in May 2009, intelligence agents were unable to access some information on BlackBerry phones for about a year after the Canadian manufacturer began using a new method to compress the data. After GCHQ cracked that problem, too, analysts celebrated their achievement with the word "Champagne," Der Spiegel reported.

The magazine printed several slides alleged to have come from an NSA presentation referencing the film "1984," based on George Orwell's book set in a totalitarian surveillance state. The slides — which show stills from the film, former Apple Inc. chairman Steve Jobs holding an iPhone, and iPhone buyers celebrating their purchase — are captioned: "Who knew in 1984...that this would be big brother...and the zombies would be paying customers?"

Snowden's revelations have sparked a heated debate in Germany about the country's cooperation with the United States in intelligence matters.

On Saturday, thousands of people in Berlin protested the NSA's alleged mass surveillance of Internet users. Many held placards with slogans such as "Stop watching us."

Separately, an incident in which a German police helicopter was used to photograph the roof of the American consulate in Frankfurt has caused a minor diplomatic incident between the two countries.

German magazine Focus reported Sunday that U.S. Ambassador John B. Emerson complained about the overflight, which German media reported was ordered by top officials after reports that the consulate housed a secret espionage site.

A U.S. embassy spokesman downplayed the story, saying "the helicopter incident was, naturally enough, the subject of embassy conversation with the Foreign Ministry, but no demarche or letter of complaint about the incident was sent to the German government."

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Frank Jordans can be reached at http://www.twitter.com/wirereporter

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