McDonald’s tops analysts’ estimates for earnings and revenue in the third quarter

McDonald’s tops analysts’ estimates for earnings and revenue in the third quarter
Written by:
Wajeeh Khan
November 9, 2020
  • McDonald’s tops analysts’ estimates for earnings and revenue in the third quarter.
  • The fast food company reports £4.11 billion of revenue and £1.68 of earnings per share.
  • McDonald’s announces a 3% increase in quarterly cash dividend to 98 pence per share.

McDonald’s Corporation (NYSE: MCD) published its financial results for the fiscal third quarter on Monday that topped analysts’ estimates for earnings and revenue. The company attributed its hawkish performance to promotions in the United States that helped invite its customers back to restaurants after months of halt due to the Coronavirus pandemic.

Shares of the company opened about 5% up on Monday but lost almost the entire intraday gain in the next few minutes. On a year to date basis, McDonald’s is currently 8.5% up in the stock market after recovering more than 50% since its year to date low in March due to COVID-19 restrictions. Interested in investing in the stock market online? Here’s a simple guide to get you started.

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McDonald’s Q3 financial results analysts’ estimates

According to Refinitiv, experts had forecast the company to print £4.10 billion of revenue in the third quarter. Their estimate for earnings per share was capped at £1.44. In its report on Monday, McDonald’s topped both estimates posting a higher £4.11 billion of revenue and £1.68 of earnings per share in Q3.

At £1.33 billion, the fast-food giant said that its net income in the third quarter was better than £1.22 billion in the same quarter last year. On a year over year basis, its net sales in Q3 were 2% down. In the prior quarter (Q2), McDonald’s had registered a 30% decline in its revenue, as per the report published in late July.

The Chicago-based company also revealed a 2.2% decline in its global comparable-store sales in the recent quarter, primarily attributed to the international markets. Same-store sales in the U.S., however, 4.6% up in Q3. McDonald’s launched a 30% discount on all menu items last week.

McDonald’s announces a 3% increase in quarterly cash dividend

McDonald’s board also decided in favour of a 3% increase in quarterly cash dividend to 98 pence per share on Monday. The American company confirmed on Monday that its capital expenditures are expected to come in at £1.21 billion this year.

In total, McDonald’s added, it is likely to open roughly 300 net new restaurants this year after previously announcing that about 200 of its U.S. locations were likely to close.

McDonald’s posted a roughly 15% gain in the stock market last year. At the time of writing, it is valued at £122.50 billion and has a price to earnings ratio of 34.46.