McDonald's Q3 Earnings Top Estimates, Partners With IBM On AOT Technology

McDonald’s Corp MCD reported third-quarter FY21 sales growth of 14% year-on-year, to $6.2 billion, beating the analyst consensus of $6.03 billion.
Global comparable sales increased 12.7% (10.2% on a 2-year basis). Comparable sales in the U.S. rose 9.6%, and the International Operated Markets segment rose 13.9%.
Sales by company-operated restaurants grew 14% Y/Y to $2.6 billion, while sales from franchised restaurants rose 15% to $3.5 billion.
Total operating costs and expenses rose 11% Y/Y to $3.2 billion.
The operating margin was 48.2%, and operating income for the quarter rose 18.2% to $2.9 billion.
Adjusted EPS of $2.76 beat the analyst consensus of $2.46.
The company recently raised its quarterly cash dividend by 7% to $1.38 per share and announced the resumption of its share repurchase program.
McDonald’s also issued a separate statement that it agreed with International Business Machines Corp IBM to accelerate further the development and deployment of its Automated Order Taking (AOT) technology.
Under the deal, IBM will acquire McD Tech Labs, which was created to advance employee and customer-facing innovations following McDonald’s 2019 acquisition of Apprente. The financial terms were not disclosed.
Upon closing, the McD Tech Labs team will become part of the IBM Cloud & Cognitive Software division.
Price Action: MCD shares are trading higher by 2.26% at $241.76 on the last check Wednesday.

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