For Immediate Release
Chicago, IL – January 25, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: McDonald’s Corporation (MCD), Burger King Holdings (BKC), Yum! Brands (YUM), Chipotle Mexican Grill (CMG) and Capital One Financial Corp. (COF).
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Here are highlights from Friday’s Analyst Blog:
McDonald’s Earnings Jump
McDonald’s Corporation (MCD) reported robust fourth-quarter 2009 results driven by effective cost control, value offerings and premium products, and a rise in comparable-store sales across all regions.
McDonald’s quarterly earnings of $1.03 per share, excluding one-time items, surged 18% from 87 cents posted in the prior-year quarter, and outdid the Zacks Consensus Estimate by a penny. On a reported basis, including one-time items, earnings came in at $1.11 per share, up 28% from year-ago quarter.
The company’s shares were up 13 cents, or 0.21%, to $63.33 in pre-market trading.
The world’s largest hamburger chain, McDonald’s said that revenue for the quarter climbed 7% to $5,973.4 million; and increased 2% in constant currencies reflecting positive comparable-store sales and expansion, partially offset by the impact of the refranchising strategy in certain major markets.
Revenue from company-operated restaurants rose 5% to $4,030 million, whereas revenue from franchise-operated restaurants jumped 14% to $1,943.4 million. Total operating income soared 22% to $1,826.3 million, and increased 14% in constant currencies.
Despite a sinking global economy, McDonald’s continues to grow same-store sales while maintaining healthy margins by expanding market share. Global comparable-store sales rose 2.3% during the quarter with U.S. sales up 0.1%, Europe up 4.8% and Asia/Pacific, Middle East and Africa (APMEA) up 1.5%. Management hinted that global comps in January 2010 remain positive.
The new menu products, including Angus Third Pounders and McCafe premium coffee, boosted U.S. comps and operating income (up 5%). McDonald’s also began offering $1 breakfast menu to curb falling sales as rising unemployment lowered the restaurant traffic during morning hours.
In Europe and the U.K., France and Russia led operating income growth of 20%. The premium product innovation, daypart extension and restaurant re-imaging program continued to drive market share gains. In APMEA, operating income jumped 51% led by Australia and China, and lower commodity prices.
Total company-operated restaurant margins for the quarter expanded 160 basis points to 18.8%. Restaurant margins increased 150 basis points to 20.3% in the U.S., 130 basis points to 19.2% in Europe, 260 basis points to 17.1% in APMEA, and 220 basis points to 15.8% in Other Countries (Canada and Latin America).
McDonald’s and other fast-food chains, like Burger King Holdings (BKC), Yum! Brands (YUM), Chipotle Mexican Grill (CMG) are faring better than casual and upscale dining restaurants, as budget-constrained consumers are trending towards lower-priced dining options.
Capital One Revenue Surpasses
Capital One Financial Corp.’s (COF) fourth quarter net income from continuing operations of 90 cents per share was substantially better than the Zacks Consensus Estimate of 45 cents. This also compares favorably to a net loss of $3.67 per share in the year-ago period.
Results for the quarter benefited over the prior-year quarter primarily from increased revenues. Also, resilience and strong profitability of the domestic credit card and auto finance businesses acted as positive catalysts to stave off a weak economy and credit headwinds. Additionally, a substantial decrease in provision for loan losses was impressive during the quarter. However, an increase in operating expenses was the downside.
Including the loss from discontinued operations, Capital One’s GAAP net income came in at $375.6 million or 83 cents per share, compared to net loss of $1.5 billion or $3.74 in the earlier quarter.
For full year 2009, Capital One’s earnings came in at $319.9 million, or 74 cents per share, compared to a net loss of 78.7 million or 21 cents in the previous year. Results for the current year were negatively impacted by $563.9 million or $1.31 per share outflow for the repayment of government bailout money.
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