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17/06/02 . by Paul Welitzkin . Dow Jones Business News . OAK BROOK, Illinois
McDonald's Looks For Improved 2nd-Quarter Results as Sales Rise
McDonald's Corp. said Monday it expects second-quarter results to rise after six straight quarterly declines, helped by improvements in its European business.
(Editor's note: This story, which was originally published June 17 , was retransmitted June 18 for a correction. McDonald's expects net income of 38 to 39 cents in the second quarter, compared with 34 cents in the year-earlier period. The previous version of this story incorrectly said the company expected earnings excluding items of 38 cents to 39 cents for the quarter.)
The restaurant chain expects earnings excluding items of 38 cents to 39 cents a share in the second quarter, above the 34 cents a share it earned in the second quarter of 2001, excluding a penny-a-share charge.
McDonald's, Oak Brook, Ill. , expects full-year earnings to range from $1.47 to $1.52 a share. The company earned $1.36 a share before items for 2001. After items, McDonald's earned $1.64 billion, or $1.25 a share, in 2001. The company is slated to release results July 23 .
Recent consensus estimates of analysts polled by Thomson Financial/First Call project earnings excluding items of 37 cents a share in the second quarter and $ 1.47 a share for the full year.
The company's European business is "performing well," McDonald's Chairman and Chief Executive Jack Greenberg said in a statement. Mr. Greenberg noted that European sales -- in constant currencies -- increased 9% for the first two months of the second quarter and 10% year-to-date through May, compared with the same periods last year.
In recent years the company's European operations have seen a drop in sales amid fears about the possibility of people contracting a brain-wasting ailment from cattle infected with bovine spongiform encephalopathy ( news - web sites), or mad-cow disease. In the first quarter, though, the European division saw sales climb 5%.
McDonald's said sales in the U.S. grew 1% for the first two months of the second quarter and 2% through year-to-date in May. For the second quarter and full year, the company expects U.S. sales to increase in low-single digits and U.S. operating income to increase in mid-single digits.
"Sales in our Asia/Pacific/Middle East/Africa segment (APMEA) continue to be affected by weak economies in several markets. In addition, in Japan , general food safety concerns continue to impact sales, even though McDonald's Japan only uses beef from Australia and New Zealand ," Mr. Greenberg noted.
Sales in Latin America on a constant currency basis were basically flat for the first two months of the quarter and for the year through May, hurt by the region's weak economies.
McDonald's, the world's No. 1 fast-food chain, said it operates more than 30, 000 restaurants in 121 countries, serving 46 million customers each day.
-Paul Welitzkin; Dow Jones Newswires; 609-520-7260
(Tim Paradis and Sue Goff of Dow Jones Newswires contributed to this report)