McDonald’s Corp. (NYSE: MCD) reported first-quarter 2014 results before markets opened Tuesday. The fast-food restaurant chain posted diluted earnings per share (EPS) of $1.21 on revenues of $6.7 billion. In the same period a year ago, the company reported EPS of $1.26 on revenues of $6.61 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.24 and $6.73 billion in revenues.

The consensus EPS estimate dropped by $0.05 since McDonald’s reported fourth-quarter 2013 results, and the revenue estimate came down $130 million. The company failed to hit even the lower targets, indicating just how weak the business is and, perhaps more tellingly, how tight the competition has become.

The drop in year-over-year earnings was attributed to a tax benefit in 2013 that was not available this year. Investors seem to be taking this into account, as the stock price is rising moderately in premarket trading this morning.

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Globally, same-store sales in the fourth quarter rose 0.5% and consolidated operating income was down 1% (up 1% on a constant currency basis). U.S. same-store sales fell 1.7%, while rising 1.4% in Europe and 0.8% in Asia. On a constant currency basis, European operating income rose 4% and Asian income declined by 2%.

McDonald’s did not offer guidance in its earnings press release, saying only that the company is “focused on stabilizing key priority markets,” including the United States, Germany, Australia and Japan. However the company’s CEO did say global same-store sales are expected to be modestly positive in April.

The company’s CEO also said:

In today’s dynamic global marketplace, our goal is to ensure that we are evolving to remain a relevant and trusted brand by serving great-tasting, high-quality, affordable food and creating memorable experiences with our brand. By leveraging a deeper understanding of what our customers want with the power of our business model, our investments in restaurant capabilities and modernization, and our hard-earned competitive advantages, we will grow McDonald’s business and deliver enduring profitable growth over the long term.

The consensus estimates for the second quarter call for EPS of $1.46 on revenues of $7.33 billion. The current full-year 2014 forecast calls for EPS of $5.81 on revenues of $29.11 billion.

McDonald’s is fighting a rear-guard action to keep its lead in the breakfast business. That is now the most competitive time slot for fast-food restaurants. The competition is not only other hamburger joints like Burger King or Wendy’s, but coffee sellers like Dunkin’ Donuts and Starbucks. The field is crowded, and the fight for market share is cutting into margins.

McDonald’s shares were up 0.8% in premarket trading, at $100.50 in a 52-week range of $92.22 to $103.34. Thomson Reuters had a consensus analyst price target of around $104.10 before the report.

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