Tim Hortons Earnings: Everything You Must Know Now

Tim Hortons Inc. (NYSE:THI) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Tim Hortons Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 17.39% to $0.81 in the quarter versus EPS of $0.69 in the year-earlier quarter.

Revenue: Rose 3.52% to $800.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Tim Hortons Inc. reported adjusted EPS income of $0.81 per share. By that measure, the company beat the mean analyst estimate of $0.75. It missed the average revenue estimate of $823.58 million.

Quoting Management: “We delivered solid profitability in the quarter and progression in same-store sales. Although the operating environment remains challenging, we are focused on building our market leadership to drive top line growth,” said Marc Caira, president and CEO. “Following a comprehensive review, we plan to take advantage of our considerable financial strength and the historic low interest rate environment by adding $900 million in incremental leverage to repurchase shares. Adding leverage to repurchase shares while maintaining our investment grade rating is consistent with our ongoing focus on shareholder value creation, while preserving our strategic flexibility to invest in the business for the long-term benefit of all shareholders,” added Caira.

Key Stats (on next page)…

Revenue increased 11.14% from $719.93 million in the previous quarter. EPS increased 32.79% from $0.61 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.79 to a profit $0.78. For the current year, the average estimate is a profit of $2.93, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)