Arcos Dorados (NYSE:ARCO) Shares Gap Up After Earnings Beat

Arcos Dorados Holdings Inc. (NYSE:ARCO) shares gapped up before the market opened on Wednesday following a better than expected earnings announcement. The stock had previously closed at $6.95, but opened at $7.47. Arcos Dorados shares last traded at $7.52, with a volume of 1,249,707 shares trading hands.

The restaurant operator reported $0.11 earnings per share for the quarter, topping analysts’ consensus estimates of $0.05 by $0.06. The company had revenue of $1.14 billion for the quarter, compared to analysts’ expectations of $1.22 billion. Arcos Dorados had a net margin of 2.89% and a return on equity of 25.36%. The firm’s revenue was up 2.8% compared to the same quarter last year. During the same period in the prior year, the company earned $0.13 earnings per share.

Arcos Dorados Cuts Dividend

The company also recently disclosed a dividend, which was paid on Friday, June 27th. Investors of record on Wednesday, June 25th were issued a $0.06 dividend. This represents a dividend yield of 313.0%. The ex-dividend date of this dividend was Tuesday, June 24th. Arcos Dorados’s dividend payout ratio (DPR) is 38.10%.

Wall Street Analyst Weigh In

Separately, JPMorgan Chase & Co. cut shares of Arcos Dorados from an “overweight” rating to a “neutral” rating and lowered their target price for the company from $10.50 to $8.80 in a research note on Wednesday, July 2nd.

Hedge Funds Weigh In On Arcos Dorados

Several large investors have recently bought and sold shares of the stock. PDT Partners LLC increased its stake in Arcos Dorados by 43.8% during the 2nd quarter. PDT Partners LLC now owns 564,473 shares of the restaurant operator’s stock valued at $4,454,000 after buying an additional 171,800 shares during the period. Raymond James Financial Inc. increased its stake in Arcos Dorados by 31.5% during the 2nd quarter. Raymond James Financial Inc. now owns 53,332 shares of the restaurant operator’s stock valued at $421,000 after buying an additional 12,785 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its stake in Arcos Dorados by 3.1% during the 2nd quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 3,508,707 shares of the restaurant operator’s stock valued at $27,684,000 after buying an additional 105,972 shares during the period. OCONNOR A Distinct Business Unit of UBS ASSET MANAGEMENT AMERICAS LLC increased its stake in Arcos Dorados by 12.0% during the 2nd quarter. OCONNOR A Distinct Business Unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 661,072 shares of the restaurant operator’s stock valued at $5,216,000 after buying an additional 70,715 shares during the period. Finally, Nebula Research & Development LLC increased its stake in Arcos Dorados by 6.3% during the 2nd quarter. Nebula Research & Development LLC now owns 166,767 shares of the restaurant operator’s stock valued at $1,316,000 after buying an additional 9,892 shares during the period. Institutional investors and hedge funds own 55.91% of the company’s stock.

Arcos Dorados Stock Performance

The company’s 50 day simple moving average is $7.38 and its 200 day simple moving average is $7.63. The stock has a market cap of $1.58 billion, a price-to-earnings ratio of 11.91 and a beta of 0.59. The company has a debt-to-equity ratio of 1.80, a quick ratio of 0.81 and a current ratio of 0.86.

Arcos Dorados Company Profile

Arcos Dorados Holdings Inc operates as a franchisee of McDonald’s restaurants. It has the exclusive right to own, operate, and grant franchises of McDonald’s restaurants in 20 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S.