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McDonald's (MCD) Posts Q4 adj.-EPS of $1.26; Comps Fell 0.9%

January 23, 2015 8:04 AM EST

McDonald's (NYSE: MCD) reported Q4 EPS of $1.26, ex-items, compared with the analyst estimate of $1.23. Revenue for the quarter came in at $6.57 billion versus the consensus estimate of $6.7 billion.

Global comparable sales decrease of 0.9%, reflecting negative guest traffic in all major segments. The Street was looking for a 1.5 percent drop.

"2014 was a challenging year for McDonald's around the world. Our results declined as unforeseen events and weak operating performance pressured results in each of our geographic segments," said McDonald's President and Chief Executive Officer Don Thompson. "As we begin 2015, we are taking decisive action to regain momentum in sales, guest counts and market share. This involves driving foundational improvements in our major markets and continuing our recovery efforts in markets affected by unusual events. We are accelerating our efforts behind solutions that capitalize on the investments we're making in our technology and our restaurants to bring McDonald's Experience of the Future to life for our customers and deliver on our commitment to drive sustained, profitable growth for all stakeholders."

Note: Q4 GAAP EPS was $1.13. The company stated:

The following items, which total $0.13 and $0.54 per share for the quarter and year, respectively, negatively impacted diluted earnings per share by 9% (10% in constant currencies) for the quarter and 10% (10% in constant currencies) for the year:

  • $0.04 and $0.31 per share for the quarter and year, respectively, due to an increase in tax reserves for 2003-2010 resulting from an unfavorable lower tax court ruling in a foreign tax jurisdiction, as well as an increase in tax reserves related to audit progression in other foreign tax jurisdictions.
  • $0.09 and $0.23 per share for the quarter and year, respectively, due to the estimated impact of the previously-disclosed supplier issue in China. In mid-July, food quality issues were discovered at a supplier to McDonald's and other food companies in China. As a consequence, results in China, Japan and certain other markets were negatively impacted due to lost sales and profitability, including expenses associated with customer recovery efforts.

For earnings history and earnings-related data on McDonald's (MCD) click here.



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