Burger King Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Burger King Worldwide (NYSE: BKW  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk reaction to news that turns out to be exactly the wrong move.

Burger King Worldwide isn't the biggest burger chain in the world, but it's been trying to regain the No. 2 spot with a big growth push lately. Let's take an early look at what's been happening with Burger King Worldwide over the past quarter and what we're likely to see in its quarterly report on Friday.

Stats on Burger King Worldwide

 

 

Analyst EPS Estimate

$0.15

Year-Ago EPS

$0.02*

Revenue Estimate

$375 million

Change From Year-Ago Revenue

(35%)*

Earnings Beats in Past 2 Quarters Since IPO

2

Source: Yahoo! Finance, S&P Capital IQ. * Based on pro forma pre-IPO figures.

Will Burger King Worldwide serve up good results?
Analysts have stayed resolute in their estimates on Burger King over the past three months, not budging a penny in their consensus earnings figures. But the stock hasn't stood still, rising more than 6% since mid-November on hopes that the company can regain its former glory.

Burger King fell off public investors' radar screens when it went private, but the IPO from private equity company 3G Capital brought the fast-food company back to the public markets. During its time off the exchanges, Burger King fell behind many of its competitors, which pushed forward with innovations to introduce healthier menu options and make capital improvements to restaurant locations.

But Burger King is taking steps to improve the quality of its fast-food offerings. Earlier this week, it announced a new deal with Starbucks (NASDAQ: SBUX  ) subsidiary Seattle's Best Coffee to greatly expand its coffee menu. The move is clearly a challenge against McDonald's (NYSE: MCD  ) impressive foray into coffee, and while it helps Burger King compete, it also gives Starbucks an additional avenue to go up against the Golden Arches.

Burger King is also looking southward to cash in on emerging-market growth. In December, the company made an agreement with franchisee Beboca to create the BK Centro America joint venture to serve Central American nations, which it hopes will lead to higher franchise income. The success of Arcos Dorados (NYSE: ARCO  ) , which delivers nine-figure royalty fees to McDonald's annually, has clearly demonstrated the potential of this approach. Burger King definitely wants in on the opportunity to expand its franchise empire.

Watch Burger King's report closely to see what impact it expects its recent initiatives to have on future earnings. In particular, with international growth having been such a huge component of fast-food success lately, it's essential for Burger King to demonstrate its ability to compete with McDonald's and its peers in the hottest overseas markets.

Can Burger King catch up to McDonald's?
As Burger King went public, McDonald's was one of the worst-performing blue-chip stocks of 2012. Our top analyst on the company will tell you whether McDonald's investors should be worried by this trend, and he'll shed light on whether McDonald's is a buy at today's prices. Click here now to read our premium research report on the company.

Click here to add Burger King Worldwide to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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