McDonald's Beats Analyst Estimates on EPS

Seth Jayson, The Motley Fool
Updated

McDonald's (NYS: MCD) reported earnings on Jan. 23. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Dec. 31 (Q4), McDonald's met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share grew.


Gross margins shrank, operating margins grew, net margins dropped.

Revenue details
 McDonald's notched revenue of $6.95 billion. The 26 analysts polled by S&P Capital IQ expected a top line of $6.90 billion on the same basis. GAAP reported sales were 1.9% higher than the prior-year quarter's $6.82 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $1.38. The 29 earnings estimates compiled by S&P Capital IQ predicted $1.33 per share. GAAP EPS of $1.38 for Q4 were 3.8% higher than the prior-year quarter's $1.33 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 39.2%, 60 basis points worse than the prior-year quarter. Operating margin was 31.6%, 150 basis points better than the prior-year quarter. Net margin was 20.1%, 10 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $6.69 billion. On the bottom line, the average EPS estimate is $1.26.

Next year's average estimate for revenue is $28.95 billion. The average EPS estimate is $5.78.

Investor sentiment
 The stock has a five-star rating (out of five) at Motley Fool CAPS, with 5,919 members out of 6,213 rating the stock outperform, and 294 members rating it underperform. Among 1,557 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,510 give McDonald's a green thumbs-up, and 47 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McDonald's is outperform, with an average price target of $96.68.

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The article McDonald's Beats Analyst Estimates on EPS originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends McDonald's and recommends the following options:Long Jan 2014 $90 Calls on McDonald's and Long Jan 2014 $95 Calls on McDonald's. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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