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Charge will result in loss for McDonald's

The fast-food company says it probably will exceed forecasts for continuing operations.

July 17, 2007|From the Associated Press

McDonald's Corp. said Monday that it expected to post its second quarterly loss in more than 50 years because of a hefty one-time charge on the sale of some Latin American operations.

But the world's largest chain of fast-food restaurants said its business was growing because of momentum from its popular breakfast menu.

McDonald's said it expected to report a net loss of 60 cents a share when second-quarter earnings are released next Tuesday.

But excluding a $1.31-a-share charge for the sale in Latin America, McDonald's said it probably would surpass Wall Street forecasts and earn 71 cents a share from continuing operations for the quarter ending June 30. That's a 27% increase from the 56-cents-a-share profit it posted in 2006.

Analysts surveyed by Thomson Financial said they expected McDonald's to earn 68 cents a share on revenue of $5.8 billion in the second quarter. Those estimates typically exclude one-time charges.

The company posted a net profit of 67 cents a share during the second quarter last year.

McDonald's only other quarterly loss since it went public in the 1950s was during the fourth quarter of 2002 and was caused by a sales slump.

Meanwhile, Oak Brook, Ill.-based McDonald's said its same-store sales rose 7.4% in the second quarter, and climbed a better-than-expected 8.4% in June.

"McDonald's continues to report robust results around the globe," RBC Capital Markets analyst Larry Miller wrote in a research note.

Shares of McDonald's rose 19 cents Monday to $52.10.

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