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McDonald's Vs. Starbucks: Which Earnings Will Be Tastier?

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McDonald's Corporation NYSE:MCD, Starbucks Corporation NASDAQ:SBUX - McDonald's Vs. Starbucks: Which Earnings Will Be Tastier?
  • Upcoming earnings highlights include the latest results from two popular purveyors of coffee and other consumables.
  • Wall Street analysts are looking for earnings growth each of them, but a top-line decline from one.
  • And, one of them has a better record of topping earnings expectations in recent quarters.

The new earnings season is underway, and among the upcoming highlights will be the latest quarterly results from long-time consumer favorites McDonald's Corporation MCD 2.11% and Starbucks Corporation SBUX 0.49%.

Wall Street analysts expect at least some growth on the bottom lines from both names, judging by the consensus forecasts. However, while the leading burger maker has a better record of beating earnings estimates in the past few quarters, it is also forecast to have a modest year-over-year decline in revenue.

Related Link: Report: McDonald's Has Hired Bankers To Help Explore Sale Of 2,800 Restaurants In Asia

Below is a quick look at what analysts expect from these two reports, followed by a glance at some of the other most prominent earnings reports due out later this week.

McDonald's

When the Golden Arches shares its first-quarter results early Friday, the consensus forecast of Estimize calls for a profit of $1.18 per share. That would be up from earnings per share (EPS) of $1.01 in the same period last year. It is also higher than Wall Street expectations of $1.16 per share. In the past three quarters, McDonald's has managed to top earnings expectations.

Revenue for the three months that ended in March will be $5.85 billion, or down less than 3 percent year-over-year, if the 46 Estimize survey respondents are correct. Wall Street analysts are looking for $5.80 billion. Either estimate would be the lowest quarterly top-line result in the past two years.

Starbucks

Wall Street's fiscal second-quarter forecast for of the ubiquitous coffee shop chain calls for earnings to have risen six cents from the year-ago period to $0.39 per share. That estimate is the same as it was 60 days ago, though the 120 Estimize respondents predict EPS will come a penny more. Note that the consensus analyst estimate has been within a penny of actual earnings numbers in the past few quarters.

Revenue narrowly fell short of estimates back in the third quarter, and now Estimize respondents are looking for $5.04 billion, just a tad more than the Wall Street forecast. That would be more than 10 percent higher year-over-year. Look for Starbucks to report its results after Thursday's closing bell.

And Others

Other companies that Wall Street analysts expect to show at least some earnings growth when they report later this week include Alphabet (Google), General Motors, Intel, Microsoft, Southwest Airlines and Verizon. On the other hand, EPS at American Airlines, American Express, Caterpillar, Coca-Cola, General Electric and Yahoo will be smaller than a year ago, if the consensus forecasts are correct.

In the following week, the new earnings season ramps up, with results expected from Apple, AT&T, Boeing, Comcast, eBay, Eli Lilly, Exxon Mobil, Facebook, Ford, Marriott, Procter & Gamble, 3M, Xerox and many more.

Disclosure: At the time of this writing, the author had no position in the mentioned equities.

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