Filed under: Earnings reports, Forecasts, Products and services, Management, Consumer experience, Competitive strategy, Starbucks (SBUX), Marketing and advertising, McDonald’s (MCD)
It has definitely been a rocky earnings season thus far, and on Monday, fast food giant McDonalds Corp. (NYSE: MCD) will get its turn to impress Wall Street when it reports its fourth quarter numbers. Shares of the company traded up slightly on Friday in anticipation of the upcoming event. Shares completed the day up 0.19% to $54.10.
So what exactly are analysts anticipating to hear from McDonalds for the quarter? Consensus estimates for the company ’s most recent quarter are running at 71 cents per share. During the fourth quarter of 2006 the company had actual earnings of 61 cents per share, so Wall Street is looking for a slightly higher than 16% jump year over year.
One thing that we have the ability to definitely expect to hear more about during the quarterly conference call will be the company’s plan to start offering mochas, lattes, cappuccinos, and espressos at all of its American locations. This is a strong move by the company to break into the coffee market, but has met some resistance from store owners.
The coffee move was first introduced back in November, and at first, store owners were pretty hesitant, citing the approximate $100,000 cost tag to get stores fitted with all the necessary equipment. As Douglas McIntyre wrote earlier this month, the company thinks that by adding coffee bars and baristas it will eventually be able to add on about $1 billion in annual sales. This is a direct attack on Starbucks (NASDAQ: SBUX) which has been struggling to keep its market share over the past year.
What are the analysts saying? Citi Investment Research analyst Glen Petraglia states that McDonalds remains his top pick in the restaurant sector. Stating that the stock isn’t exactly what he would call “cheap,” Petraglia says that he still feels that the downside is pretty limited on this one.
The last time that the company reported earnings was back on October 19, when it matched Wall Street estimates with 61 cents per share. To find the last time that the company was unable to at least come in in-line with analyst estimates you would have to look all the way back to January 2005, when it missed estimates for its fourth quarter 2004 by one penny.
Will the trend continue for McDonalds, or will we see a repeat of fourth quarter 2004. We’ll find out early Monday morning, and will update you as soon as the numbers come in, as well as gage Wall Street’s reaction to the quarterly numbers.
Let’s close with a one year chart to see how the stock has been performing over the past 52 weeks:
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor’s Observer
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