McDonald’s stock hits all time high
NEW YORK (CNNMoney.com) — McDonald’s shares hit a record high Tuesday, and it continued its recent run higher, despite disappointing earnings numbers.
The world’s largest fast food company, McDonald’s (MCD) said its third-quarter sales increased 4 percent from last year, topping $17 billion. That’s up from last year’s quarter’s $16.8 billion, while the company’s pre-tax profit was $1.6 billion, versus $1.3 billion in the year-ago period, a drop of 14%.
But if you compare McDonald’s pre-tax income to the top companies in the S&P 500, which is the nation’s iconic index of publicly traded companies, McDonald’s looks like “the next victim of the recession.”
The index of the 500 biggest companies in the U.S., which includes McDonald’s, dropped 13 percent in the second quarter, compared to a 2.4 percent decline, in the same period last year.
McDonald’s stock was up 12.5% Tuesday, compared to a 16.1% performance on the same day last year. Both its share price and the S&P 500 closed at new high.
In a conference call with analysts, McDonald’s CEO Steve Easterbrook said the company is considering cutting its hours of service, as well as cutting the prices of its famous Big Macs. Easterbrook didn’t give specifics on the two ideas.
“We believe we are in a recovery phase. It’s not a boom or slow recovery,” said Easterbrook. “The timing is much more gradual. It’s just taken us a few quarters to realize that. This is a long, tough, challenging, and slow process, but we believe that that’s starting to accelerate.”
The company’s market capitalization continues to climb higher. McDonald’s shares were trading for $45 on Tuesday, topping the stock market’s price peak the night before of $42.79.
Even some of the Wall Street analysts who cover McDonald’s aren’t exactly cheering on the stock.
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