McDonald's will likely report strong February sales amid mild weather, extra day because of Leap Year, new menu items, analysts say; company to announce results March 8

Nevin Barich

NEW YORK , March 6, 2012 (Associated Press) – McDonald's Corp.'s performance in February likely benefited from mild weather, an extra day because of Leap Year and new menu items like the Chicken McBites, analysts said Tuesday.

Sterne Agee analyst Lynne Collier said she expects the world's biggest fast food chain on Thursday to report revenue at stores open at least a year to be up 8.7 percent.

The figures are a snapshot of money spent on food at both company-owned and franchised restaurants. They do not reflect corporate revenue. The comparison is a key measure of a restaurant chain's performance, because it excludes the impact of recently opened or closed stores.

Collier also raised her first-quarter earnings forecast for the fast-food chain to $1.26 per share, from $1.22 per share. Analysts on average expect net income of $1.24, according to FactSet Research.

Collier reiterated her "Buy" rating on the company, citing the company's menu innovation, upgraded restaurants and ability to gain market share through advertising. She also raised her price target to $112, from $109.

Shares of McDonald's, based in Oak Brook, Ill., were down 29 cents at $99.65 in early afternoon trading. It's trading slightly off an all-time high above $101 reached in January.

Baird analyst David Tarantino maintained his "Outperform" rating on McDonald's and said he expects revenue at stores open at least a year to rise 8.5 percent for the month. He said the company's performance in the U.S. should get a boost from new menu items like the Chicken McBites and Caramel Mochas.

Although the company should post strong results for the Asia Pacific Middle East Africa region, he noted that the performance may be limited by the timing of Chinese New Year.

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