Monday got off to a shaky start for the stock market, with major benchmarks initially picking up ground but then falling throughout the day to finish lower. Merger and acquisition activity dominated the headlines, with large combinations in the wireless telecommunications sector and the energy refining industry showing that corporate America is in a buying mood. Despite the weakness in the market, earnings season continued to generate some positive news. McDonald's (MCD -0.80%), First Data (NYSE: FDC), and Financial Engines (FNGN) were among the best performers on the day. Here's why they did so well.
McDonald's serves up good results
McDonald's was the strongest stock in the Dow, rising 6% after the company reported first-quarter financial results. Global comparable-restaurant sales grew at a 5.5% pace during the period, with order size and price increases making up the bulk of the gains but with traffic also on the rise. Comps domestically were less robust at 2.9%, but McDonald's got big benefits from the weaker U.S. dollar in its international sales, and that helped push adjusted earnings up by more than 20% compared to the year-earlier quarter. With ongoing innovations to the fast-food giant's menu, McDonald's is taking advantage of customers' search for value, and patrons appreciate the changes under the Golden Arches.
First Data rides the tech wave
Shares of First Data jumped 18% in the wake of the business solutions provider's first-quarter financial report. Revenue rose 10% after adjusting for changes to standard accounting rules, with adjusted net income rising 8% from year-ago levels. First Data saw extraordinary strength in its global business solutions unit, where segment sales were higher by 15% on a comparable basis, thanks largely to strength in Latin America. Shareholders also liked First Data's guidance boosts, which included calls for revenue growth of 6% to 7% for the year, with a 5% increase to earnings projections to a new range of $1.42 to $1.47 per share. With the stock bouncing back from recent weakness, investors are happy with First Data's latest news.
Financial Engines kicks into a higher gear
Finally, Financial Engines stock soared more than 31%. The retirement plan advisor and financial specialist accepted a $3 billion buyout bid from private equity investors Hellman & Friedman. Under the deal, Financial Engines shareholders will get $45 per share in cash. With cutthroat conditions in the financial services industry, it's not surprising to see interest in a company like Financial Engines, which has close relationships with major corporations in assisting with their 401(k) plans and similar employee benefits plans. The combination will give Hellman & Friedman an even stronger competitive position in financial advice, given that it already has a valuable independent financial planning and investment management company under its corporate umbrella.