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McDonald's to miss in 3Q
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September 19, 2001: 9:38 a.m. ET
Chain sees slight decline in operating profits but gain from Japanese IPO
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NEW YORK (CNNfn) - Fast food chain McDonald's Corp. warned Wednesday its third-quarter earnings from operations will be slightly below analysts' forecasts.
The Oak Brook, Ill.-based company said it expects earnings per share of 41 or 42 cents. But that guidance includes a $137 million after-tax gain from an initial public offering of its Japanese operations as well as a special charge of $100 million to close about 160 restaurants.
Earnings tracker First Call says both those items will be excluded for purposes of comparison to analysts' forecasts, leaving the company with a new EPS guidance of 38 or 39 cents, just below the current First Call forecast of 40 cents and year-ago EPS of 41 cents.
The company said including the special items and without the impact of a change in currency exchange rates it would be on target for EPS of 43 or 44 cents.
The company said it had gains in July and August in sales at U.S. restaurants open at least a year, a closely watched retail measure known as same-store sales. European operations had lower same-store sales in July, but they turned positive in August. Fears of European consumers due to mad cow disease and hoof and mouth disease have hurt the company's results in some earlier periods.
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The company also said it expects full-year earnings per share will be flat in constant currency if the special items are included. Those items reduce earnings per share by about 3 cents, and currency exchange rates will reduce EPS by another 5 cents if there is no further change in the value of the dollar. So that guidance suggests the company will post a full-year EPS drop to about $1.38 from $1.46 a year earlier, which puts it basically in line with First Call's $1.39 EPS forecast for this year.
Shares of McDonald's (MCD: up $0.98 to $28.99, Research, Estimates), a component of the Dow Jones industrial average, gained some ground in trading early Wednesday. 
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McDonald's
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