McDonald's Q4 Earnings, Revenues Miss Street; Global Comps Rise; Stock Up

McDonald's

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(RTTNews) - Fast food chain McDonald's Corp. reported Monday slightly lower profit in its fourth quarter with nearly flat revenues. Adjusted earnings and revenues missed market estimates. However, the company recorded growth in operating income as well as global comparable sales, despite a weakness in U.S.

In pre-market activity on the NYSE, McDonald's shares were trading at $301.64, up 2.5 percent.

Chairman and CEO Chris Kempczinski said, "Accelerating the Arches continues to be the right strategy as we focus on growing market share. We're playing to win, focusing on our customers with outstanding value, exciting menu innovation and culturally relevant marketing."

For the quarter, the foodservice retailer's net income dropped 1 percent to $2.017 billion from last year's $2.039 billion. Earnings per share, however, remained at prior year's level of $2.80.

Adjusted earnings were $2.035 billion or $2.83 per share, compared to prior year's $2.145 billion or $2.95 per share. The Wall Street analysts on average expected the company to report earnings of $2.86 per share. Analysts' estimates typically exclude special items.

Operating income, however, grew 2 percent from last year to $2.87 billion, and the growth was 3% in constant currencies. Adjusted operating income decreased 2%.

Revenues for the quarter edged down to $6.388 billion from $6.406 billion a year ago. The analysts had expected revenues of $6.48 billion for the quarter.

Revenues from franchised restaurants grew 2 percent year-over-year to $3.96 billion, while sales by Company-owned and operated restaurants fell 7% to $2.31 billion.

Global comparable sales increased 0.4 percent, compared to a 3.4 percent increase a year ago. U.S. comparable sales decreased 1.4 percent, compared to prior year's 4.3 percent growth, reflecting a decline in average check, partly offset by slightly positive comparable guest counts.

International Operated Markets segment increased 0.1 percent. Slightly positive segment performance reflected positive comparable sales in most markets, partly offset by negative comparable sales in some markets, led by the U.K.

International Developmental Licensed Markets grew 4.1%, reflecting positive comparable sales, led by the Middle East and Japan.

Systemwide sales increased 2 percent.

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