McDonald’s Corporation Earnings: Inflation Pushes Costs Higher, Margins Lower

S&P 500 (NYSE:SPY) component McDonald’s Corporation (NYSE:MCD) reported higher costs affecting margins. McDonald’s Corp. franchises and operates fast food restaurants worldwide.

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McDonald’s Earnings Cheat Sheet for the First Quarter

Results: Net income for McDonald’s Corporation rose to $1.21 billion ($1.15/share) vs. $1.09 billion ($1/share) YoY. A rise of 10.9% from the year earlier quarter.

Revenue: Rose 8.9% to $6.11 billion YoY.

Actual vs. Wall St. Expectations: MCD fell short of the mean analyst estimate of a loss of $1.14/share. Estimates ranged from $1.05 per share to $1.16 per share.

Quoting Management: “Our dedication to building the McDonald’s business by optimizing our menu, modernizing the restaurant experience and broadening accessibility continues to drive our global performance,” said McDonald’s Chief Executive Officer Jim Skinner. “For the quarter, McDonald’s delivered double-digit earnings per share growth led by higher comparable sales and guest counts across all geographic segments and strong franchise margin performance. Despite the challenges of the current economic environment, I am confident that McDonald’s can continue to grow by listening to our customers and remaining true to our proven Plan to Win strategy.”

Key Stats:

The company has now seen net income rise in three-straight quarters. In the fourth quarter of the last fiscal year, net income rose 2.1% and in the third quarter of the last fiscal year, the figure rose 10.1%.

Competitors to Watch: Wendy’s Arby’s Group Inc. (NYSE:WEN), Starbucks Corporation (NASDAQ:SBUX), Sonic Corporation (NASDAQ:SONC), Darden Restaurants (NYSE:DRI), Yum! Brands Inc. (NYSE:YUM), Chipotle Mexican Grill (NYSE:CMG), and Jack in the Box Inc. (NASDAQ:JACK).

Today’s Performance: Shares of MCD are trading at $76.80 as of April 21, 2011 at 10:01 AM ET, down 2% from the previous close.

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