The 10-second takeaway
For the quarter ended June 30 (Q2), McDonald's met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. GAAP earnings per share expanded.
Gross margins dropped, operating margins expanded, net margins grew.
McDonald's recorded revenue of $7.08 billion. The 24 analysts polled by S&P Capital IQ looked for a top line of $7.09 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.38. The 28 earnings estimates compiled by S&P Capital IQ forecast $1.40 per share. GAAP EPS of $1.38 for Q2 were 4.5% higher than the prior-year quarter's $1.32 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 39.0%, 30 basis points worse than the prior-year quarter. Operating margin was 31.0%, 70 basis points better than the prior-year quarter. Net margin was 19.7%, 20 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $7.47 billion. On the bottom line, the average EPS estimate is $1.55.
Next year's average estimate for revenue is $28.46 billion. The average EPS estimate is $5.69.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 5,915 members out of 6,222 rating the stock outperform, and 307 members rating it underperform. Among 1,540 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,497 give McDonald's a green thumbs-up, and 43 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McDonald's is outperform, with an average price target of $106.08.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends McDonald's and recommends the following options:long January 2014 $90 calls on McDonald's and long January 2014 $95 calls on McDonald's. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.