McDonalds: Would You Like Some Profits with That?

This week, earnings season really gets rolling with a BANG as more than 900 companies are set to bring home their financial report cards.

So far the reaction we are seeing on Wall Street to first quarter earnings releases can be described as, “it’s not so bad after all.”

Intel (INTC) reports inline numbers: The market is up 250 points.

Merrill Lynch (MER) and Citibank (C) post huge losses, and both of their stocks go up.

Sandisk (SNDK) misses its bottom line number big time, but the reaction is, hey, look at its sales…

Expectations apparently are so low that all a company needs to do, as Fortune’s Colin Barr wrote about the Citi, is beat their “doomsday scenario.” Folks, that’s a fairly low hurdle to clear.

In light of the market treating bad news as if it were good news, The Correct Call has focused its filters on those companies that are likely to clear the bar.

A familiar name that has served billions of us is likely to offer up an earnings surprise: McDonalds (MCD).

McDonalds is set to report earnings before the market opens on Tuesday, April 22nd. Mickey Ds is expected to earn $0.70 per share for its first quarter. We expect MCD to announce earnings that will beat investors’ and analysts’ expectations by a penny or two.

Last quarter, MCD posted a profit that was $0.02 higher than expectations, and the stock soared 10% in less than three weeks. A similar result, and MCD could challenge its 52-week high of $63 and change.

Aggressive investors might want to consider the McDonalds May 57.5 Call Options which are trading around $1.50. If we have made The Correct Call, the May 57.5 calls would be worth around $4.50. That should make you feel like you finally peeled off the Boardwalk game piece.