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29/10/01 . Unknown . Yahoo . U.S.A.
McDonald's Warns on 2002 Profits
OAK BROOK, Ill. (AP) - McDonald's Corp. stock fell nearly 6 percent Monday after the world's biggest restaurant company scaled back its earnings estimate for next year.
The company said 2002 earnings per share, excluding special items, are seen as increasing by 5 percent to 10 percent, short of Wall Street's expectations.
Citing the weakened global economy, it also said it expects to open about 200 fewer restaurants - 1,300 to 1,400 - next year than in 2001. The vast majority of its restaurant openings in recent years have been outside the United States.
McDonald's stock sank $1.67, or 5.8 percent, to close at $27.28 on the New York Stock Exchange (news - web sites).
The company did not cite a specific new earnings estimate, but analysts surveyed by Thomson Financial/First Call had expected the fast-food giant to earn $1.54 per share next year, up 12 percent from the $1.37 they estimate for 2001.
Senior management told analysts in a meeting at McDonald's headquarters that the current restructuring, which will entail a charge of $175 million to $200 million in the fourth quarter this year, should set the stage for stronger growth in 2003.
"Our goal is to improve results in 2002 and put ourselves in position to return to double-digit earnings growth," chairman and chief executive Jack Greenberg said in a news release.
McDonald's also announced a newly authorized $5 billion share repurchase program.
Earlier this month, the company announced it is shedding 500 to 700 jobs and closing nearly half of its regional offices as part of a reorganization aimed at reducing costs and improving customer service and sales. The cuts affect about 10 percent of its corporate work force.
Pressured by a sluggish economy, an international mad-cow scare and the saturation of the U.S. fast-food market, McDonald's has reported four straight quarters of declining earnings.
The Oak Brook-based company has more than 29,000
restaurants in 121 countries.