NEW YORK (TheStreet) -- Burger King Worldwide (BKW) released its first quarter earnings information on Friday, missing Wall Street revenue expectations but increasing profits during the period.
The stock is flat in early market trading today.
The fast food restaurant franchiser reported net income of $60.4 million, or 20 cents per diluted share excluding one time expenses., beating analysts consensus estimates by 1 cent.
Revenue for the quarter was reported at $240.9 million, missing analysts guidance of $241.3 million.
TheStreet Ratings team rates BURGER KING WORLDWIDE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BURGER KING WORLDWIDE INC (BKW) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 35.71% and other important driving factors, this stock has surged by 39.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although BKW had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- BURGER KING WORLDWIDE INC has improved earnings per share by 35.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BURGER KING WORLDWIDE INC increased its bottom line by earning $0.66 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($0.94 versus $0.66).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, BURGER KING WORLDWIDE INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The debt-to-equity ratio is very high at 2.00 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.79, which shows the ability to cover short-term cash needs.
- Net operating cash flow has decreased to $57.50 million or 27.94% when compared to the same quarter last year. Despite a decrease in cash flow of 27.94%, BURGER KING WORLDWIDE INC is in line with the industry average cash flow growth rate of -31.16%.
- You can view the full analysis from the report here: BKW Ratings Report