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Omar Venerio
Omar Venerio
Articles (1681) 

Wall Street Declines on Thursday

McDonald's posts earnings miss

U.S. stocks were in the red on Thursday with utilities and materials leading declines in the indexes. The Dow Jones Industrial Average fell 1.24% to 24,329, the S&P 500 Index declined 1.1% to 2,907 and the Nasdaq Composite Index dipped 0.6% to 8,861.

Non-index stocks have also posted gains and losses recentlyShares of McDonald's Corp. (NYSE:MCD) fell more than 1% on Thursay after the company announced first-quarter results. It posted earnings of $1.47per sharefalling 9 cents short of estimates. Revenue of $4.71 billion registered a 6.2% year-over-year decline, toppingexpectations by $50 million.

Following our strong performance in 2019, McDonald's began 2020 with exceptional global momentum, and our January and February sales were reflective of that trend," President and CEO Chris Kempczinski said. "Since then, the global crisis caused by the COVID-19 pandemic has significantly disrupted our business, and we continue to operate in a very challenging and unpredictable environment." 

Global comparable sales declined 3.4%, down from a gain of 5.4% in the prior-year quarter. Consolidated revenues decreased 6%. The operating income reached $1.69 billion, down from $2.09 billion in the same quarter of 2019. Further, the foreign currency translation had a negative impact of 2 cents per share on earnings.

To preserve financial health, the company has suspended the share repurchase program and reduced capital expenditures by $1 billion for 2020.

Moreover, about 75% of restaurants worldwide remain open, focusing on drive-thru, delivery and take-away services. In countries such as Australia, Canada, Germany and Russia, operations have been limited, while in France, Italy, Spain and the United Kingdom, they have temporarily closed stores.

Ken Fisher (Trades, Portfolio) trimmed his holding by 20% to 10,712 shares and Mark Hillman (Trades, Portfolio) reduced his position by by 0.6% to 16,836 shares. Philippe Laffont initiated a new position of 2,048 shares.



Global markets

The main European stock markets traded in the red.The U.K.'s FTSE 100 fell 3.50%, France's CAC 40 declined 2.12%, Germany's Dax retreated 2.22% and Spain's Ibex 35 slumped. 1.89%.

In Asia, Japan's Nikkei 225 gained 2.14%, India’s BSE Sensex rose 3.05%, Hong Kong's Hang Seng advanced 0.28% and China's Shanghai Composite jumped 1.33%.

Disclosure:The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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