McDonald's Beats Up on Analysts Yet Again

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McDonald's (NYS: MCD) reported earnings on Jan. 24. 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 expanded and earnings per share grew.

Gross margins were steady, operating margins improved, and net margins improved.

Revenue details
McDonald's reported revenue of $6.8 billion. The 22 analysts polled by S&P Capital IQ anticipated a top line of $6.8 billion. Sales were 9.8% higher than the prior-year quarter's $6.2 billion.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $1.33. The 23 earnings estimates compiled by S&P Capital IQ forecast $1.30 per share. GAAP EPS of $1.33 for Q4 were 15% higher than the prior-year quarter's $1.16 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 39.8%, about the same as the prior-year quarter. Operating margin was 30.1%, 100 basis points better than the prior-year quarter. Net margin was 20.2%, 20 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $6.5 billion. On the bottom line, the average EPS estimate is $1.23.

Next year's average estimate for revenue is $28.4 billion. The average EPS estimate is $5.73.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 5,433 members out of 5,714 rating the stock outperform, and 281 members rating it underperform. Among 1,485 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,435 give McDonald's a green thumbs-up, and 50 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 $103.

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At the time this article was published 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. Motley Fool newsletter services have recommended buying 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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