McDonald’s Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component McDonald’s (NYSE:MCD)¬†will unveil its latest earnings tomorrow, Wednesday, January 23, 2013. McDonald’s franchises and operates fast food restaurants worldwide.

McDonald’s Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.33 per share, no change from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.38. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.33 during the last month. Analysts are projecting profit to rise by 0.9% versus last year to $5.32.

Past Earnings Performance: The company is looking to break the streak of missing estimates in the past two quarters. Last quarter, it fell short of analyst expectations by reporting net income of $1.43 per share against an estimate of profit of $1.47 per share. The quarter before that, it missed forecasts by 6 cents.

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Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.01 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.24 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 14.6% to $4.15 billion while assets decreased 6.5% to $4.21 billion.

A Look Back: In the third quarter, profit fell 3.5% to $1.46 billion ($1.43 a share) from $1.51 billion ($1.45 a share) the year earlier, missing analyst expectations. Revenue fell 0.2% to $7.15 billion from $7.17 billion.

Here’s how McDonald’s traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

MCD