McDonald’s first quarter earnings fell short of analyst’s expectation

McDonald’s reported its first quarter earnings on April 22 mornings. The company failed to meet analyst’s expectation regarding EPS and revenue.

McDonald’s Corporation reported its first quarter of fiscal year 2015 earnings on Wednesday April 22 before market open.

McDonald’shas been facing a downside for more than two years now in its revenue, amongst adverse news which are not likely to arrive to an end in the expected future.

Analysts believes that the quarterly outcomes are not up to the mark, and expects that there is much possibility that the market share of the international fast food chain will endure to decline if the new competition enters the market.

After the announcement, the share of the company went up during pre-market session. McDonald’s earnings fell short of analysts’ expectation. The main reason for the miss is considered to be as the company is still not completely able to come out of Japan and China food scandal, and also tough competition in US.

Revenue of the company went down to $5.96 billion from previous $6.7 billion; however its net income fell by over 32.6% and reached $811.5 million in the same period. The fast food chain posted earnings of $1.01 per share compared to prior year quarter earnings of $1.21 per share.

Although, McDonald’s is under extreme pressure, analysts think that the company still has a lot of potential compared to its competitors. Analysts also pointed out several catalysts that can help McDonald’shave to reach the top position once again.

The analysts pointed out that the restaurant can reach the population of United States as it has got nearly 14.300 outlets for dine in and take away. Furthermore, McDonald’s is all set to launch 600 to 700 more outlets internationally by the end of this year. Altogether, it has approximately 36,200 outlets all over the globe. With robust financial support, the company has an upper hand over its rivals to promote their business better than anyone else.

One more point that McDonald’s should emphasize for future growth is increasing the time of breakfast deals. The fast food chain received a lot of request from customers to increase the time of its breakfast hours. This can be the way by which McDonald’s can entice its consumers to visit the restaurant.