McDonald’s exceeds analysts’ third quarter earnings and revenue estimates.
The fast food company reported sales of £4.11 billion and earnings per share of £1.68.
McDonald’s announces a 3% increase in quarterly cash dividend to 98 pence per share.
McDonald’s Corporation (NYSE: MCD) released its third quarter financial results on Monday, which exceeded analysts’ estimates for earnings and revenues. The company attributed its combative performance to promotions in the United States that helped re-invite customers to restaurants after months of downtime due to the coronavirus pandemic.
The company’s shares opened Monday with a price increase of about 5%, but lost almost all of its intraday profit in the next few minutes. On an annualized basis, McDonald’s is currently up 8.5% on the stock market after recovering by more than 50% since its year-to-date low in March due to COVID-19 restrictions. Are you interested in investing in the stock market online? Here is a simple guide to help you get started.
Analyst estimates of McDonald’s financial results for Q3
According to Refinitiv, experts had forecast the company’s sales of 4.10 billion pounds sterling for the third quarter. Their estimate for earnings per share was limited to 1.44 pounds sterling. In its Monday report, McDonald’s exceeded both estimates with higher revenues of £4.11 billion and earnings per share of £1.68 in the third quarter.
At £1.33 billion, the fast food giant said its third quarter net profit was better than £1.22 billion in the same quarter last year. On a year-on-year basis, his net sales in the third quarter were down 2%. In the previous quarter (Q2), McDonald’s had reported a 30% drop in sales, according to the report published at the end of July.
The Chicago-based company also reported a 2.2% decline in its global sales in comparable stores in the last quarter, primarily due to international markets. In the United States, however, sales in comparable stores increased 4.6% in the third quarter. McDonald’s introduced a 30% discount on all menu items last week.
McDonald’s announces a 3% increase in quarterly cash dividend
McDonald’s Board of Directors also decided on Monday to increase the quarterly cash dividend by 3% to 98 pence per share. The American company confirmed on Monday that its capital expenditure is expected to total £1.21 billion this year.
In total, McDonald’s added, it is expected to open about 300 new restaurants net this year, after previously announcing that about 200 of its US locations are likely to close.
McDonald’s posted a gain of about 15% on the stock market last year. At the time of writing, the company is valued at £122.50 billion and has a price-earnings ratio of 34.46.