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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (123708)	9/19/2001 11:52:32 AM
From: clochard	Read Replies (1) \| Respond to of 436258

Wednesday September 19, 11:48 am Eastern Time McDonald's: Earnings to Beat Estimates OAK BROOK, Ill. (Reuters) - McDonald's Corp. (NYSE:MCD - news), the world's largest restaurant company, said Wednesday it expects third-quarter earnings to exceed Wall Street estimates and maintained its forecast for ``relatively flat'' full-year earnings before the impact of a strong U.S. dollar. ADVERTISEMENT Shares in the company, whose profits have been hampered since late last year by concern over mad cow disease in Europe and foreign currency weakness, rose 74 cents, or 2.64 percent, to $28.75 Wednesday on the New York Stock Exchange. Chairman and Chief Executive Officer Jack Greenberg said McDonald's expects earnings per share of 41 cents to 42 cents in the third quarter, or 43 cents to 44 cents before the impact of foreign currency translation and after special items, compared with 41 cents a year ago. Analysts' estimates ranged from 35 cents per share to 43 cents with a consensus at 40 cents, according to market research firm Thomson Financial/First Call. The fiscal 2001 mean estimate was $1.39, according to First Call. Unlike other major companies that have warned of earnings shortfalls following the attacks on the World Trade Center and Pentagon last week, McDonald's said the guidance reflects expectations for significant improvement in the second half of the year compared with the first half, most of which is expected in the fourth quarter. McDonald's U.S. operations had positive sales at stores open at least one year, or comparable-restaurant sales, in both July and August, the company said. McDonald's essentially ``endorsed the published estimates for the third quarter and the fourth quarter, sales in Europe look to be firming and the U.S. is posting positive comp-store sales,'' said Damon Brundage, Raymond James restaurant analyst. ``It looks like they will hit the fourth-quarter number though (earnings are) more expense controlled than revenue driven, and companies that hit the estimates in this environment are going to win,'' Brundage said. In Europe, comparable sales were negative in July, but turned positive in August with a strong trend in France, McDonald's said. Germany also had significant improvement in August compared with the first half of the year. ``While we cannot predict currency fluctuations, if foreign currency exchange rates remain constant for the remainder of the year, translation will reduce full-year reported earnings per share by about 5 cents,'' Greenberg said. Profit is reduced when weakening foreign currencies are translated into U.S. dollars. McDonald's Systemwide sales for the first eight months of 2001 rose 5 percent to $27.2 billion in constant currency terms from a year ago. Sales rose 4 percent in the first two months of the third quarter under the same conditions. In the first two months of the third quarter, sales in constant currencies grew 5 percent in Europe, 4 percent in the U.S., 3 percent in Asia/Pacific and 8 percent in Latin America. Third-quarter results will include a $137 million after-tax gain related to the initial public offering of McDonald's Japan and an after-tax charge of nearly $100 million, Greenberg said. The charge primarily relates to about 160 restaurant closings. McDonald's previously said it expects to announce a plan in the fourth quarter to reduce selling, general and administrative expenses, which may result in a special charge to earnings.