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Market Update

Earnings on Tap: McDonald's

Investors will be hoping for a surprise from McDonald's after Yum Brands reported unexpectedly strong results last week.

Oct 18, 2012

The world's largest fast-food restaurant chain, McDonald's (MCD), is due to report third-quarter results before the opening bell on Friday. Wall Street analysts the Oak Brook, Ill., company to report earnings of $1.47 per share compared with $1.45 a year ago.

Although earnings will partly be boosted by the company's share-repurchase program, McDonald's is facing slower growth globally as well as currency headwinds. The company recently issued an outlook statement predicting same-store sales would be slower than in the second quarter. Forecasts were downgraded following the worst July same-store-sales figure in nine years. However, Morningstar analyst R.J. Hottovy says the company remains resilient despite the increasingly challenging environment for restaurant operators.

After a decline of more than 6% year to date in its share price, McDonald's trades around Hottovy's fair value estimate.

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