Fast food giant McDonald’s (MCD) announced a 24% jump in first quarter profits for its January through March quarter. The company is one of several international businesses that have benefited from geographic diversity and the weak dollar, in light of US economic challenges.
The company, based on Oakbrook, Illinois, a suburb of Chicago, said it earned $946.1 million during the quarter, which amounts to 81 cents per share. This was a sharp jump from last year’s first quarter that saw $762.4 million, or 62 cents per share. It really inspired stock trading, however, by increasing revenues to $5.6 billion. This six percent revenue growth easily topped analyst estimates, which always leads to traders grabbing a stock for their trading portfolio.
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According to Thomson Financial, analysts were widely anticipating revenue of $5.4 billion, and a profit closer to 70 cents per share. The company credited its strong international performance and universal improvements in guest count and sales for driving its quarterly performance.
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In Europe, Asia, the Middle East and Africa, the company experience sales growth consistently around 23 to 24 percent. This helped carry the company in spite of US same store sales growth of only 2.9 percent for the quarter. McDonald’s, along with several other global players, have symbolized the important of global diversity. Internationally strong US companies have held up much better during the last several months.
McDonald’s is often included in stock market portfolios by investors using long-term or income building stock trading strategies. Long-term investors are currently enjoying the companies $58-plus share price and its $1.50 per share annual dividend yield. The stock currently trades just a few dollars off its 52-week high. It is also just shy of its $62.64 one year analyst price target. There do not seem to be a lot of stock market tricks and advice required to be successful with the company over the long-term.
While long-term stock trading strategies benefit from the stock’s stabilities, some traders may look to covered call strategies, or covered calls to make a short-term profit play given the stock’s high price at the moment.
Over the long-term, because of its high dividend and company stability, McDonald’s is generally one of the safe stock investing plays. It is a company that maintains several strong competitive advantages and is widely recognized as one of the most recognized and trusted brands in the world. These are all factors that contribute to giving the stock help even during less stable US economic conditions. The company remains a global leader and in many countries, a US cultural icon.
One of the other advantages to global operators like McDonald’s has been the weak dollar. The weak American currency has helped increase revenue for international companies by allowing them to take foreign profits, based in stronger currencies, and change them for more dollars at home. Several companies have identified the weak dollar as a leading contributor to better-than-expected results in recent weeks.
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