McDonald's Sales Get Fat on Premium Hamburgers

McDonald's did not beat nor fall short of Wall Street estimates of $1.76 per share,

Author:: Cathaleen Chen
Publish date:: Oct 24, 2017 9:29 AM EDT

Mickey D's just served up some sales sizzle.

Mcdonald's Corporation (MCD) - Get Report more or less met Wall Street predictions of its third-quarter earnings, posting earnings of $1.76 per share and a 6% increase in global comp sales, thanks to restaurant expansion.

The analyst consensus for earnings projection was $1.77 per share, according to Factset, and $1.76 according to Bloomberg. In its Tuesday, Oct. 24 report, McDonald's also announced third-quarter revenue to be $5.75 billion, or in line with what was projected by the Street.

Same-store sales in the U.S. grew by 4%, an uptick that the fast food giant attributes to its new Signature Crafted premium sandwiches and the McPick 2 deals. That's two items for $2.50 or two bigger items for $5.

Operating income saw a steep rise of 44%, to $3.08 billion, thanks to the $850 million gain McDonald's made from selling its controlling interest in its China and Hong Kong operations to Citic, a Chinese state-owned conglomerate and the Carlyle Group. Which . The deal, which closed in august, totaled more than $2 billion, but McDonald's still holds a 20% stake.

"During the quarter, we refranchised our businesses in China and Hong Kong, reaching our target to refranchise 4,000 restaurants more than a year ahead of schedule," said McDonald's Chief Financial Officer Kevin Ozan in a prepared statement.

"Our more heavily franchised structure will continue to drive shareholder value by providing a more stable revenue and income stream with higher returns on invested capital."

Lastly, the company announced that it returned $2.9 billion to shareholders through share buybacks and dividends in the third quarter,and unveiled a 7% increase in quarterly dividents beginning in the fourth quarter.

Its stock is down 1.8% early Tuesday morning before the bell.

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