McDonald's Profit Misses Forecast, but Revenue Beats

McDonald'sposted earnings that came slightly below expectations Monday, though the Dow component topped Wall Street's expectations on revenue.


The fast-food chain reported fourth-quarter net income of $1.16 a share. However, analysts are excluding a penny per-share of income tied to its Latin American operations.

Excluding that item, McDonald's earned $1.15 a share, just shy of the $1.16 a share average analyst estimate, according to Thomson Reuters. But higher than $1.03 a share, excluding items, that it earned during the same period a year earlier.

McDonald's reported sales rose to $6.21 billion from $5.97 billion last year. Analysts projected revenue of $6.20 billion, Thomson Reuters said.

McDonald's also said that global comparable sales rose 5 percent, with the US up 4.4 percent, helped by new menu offers and the McCafe line-up.

"China is a major focus and the stock has a potential longer-term to have a higher multiple as the China story unfolds, similar to what Yum Brands has benefited from in the last couple of years," Matthew DiFrisco, senior analyst at Oppenheimer & Co., told CNBC.

However, DiFrisco said the slowdown in consumers among various European countries poses a concern.

"The skeptical investor is going to look at this and say: 'Is this the beginning of austerity measures and the tightening of European McDonald’s consumer?'"

Shares of McDonald's were lower in pre-market trading Monday. Get real-time quotes for McDonald's here.

"During 2010, we continued our efforts toward becoming our customers' favorite place and way to eat and drink—and customers rewarded us by visiting our restaurants more often," said McDonald's CEO Jim Skinner, in a prepared statement. "As a result, we generated strong sales and delivered profitable market share growth, along with higher global revenues, operating income and earnings per share."

"McDonald's continued success demonstrates that our 'Plan to Win' works in any environment and has positioned us to continue our performance in 2011," he added.