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18/01/02 . By Deborah Cohen . Reuters . CHICAGO

McDonald's Likely to Post Flat Results

Fast-food giant McDonald's Corp. plans next week to shut the door on what Chief Executive Jack Greenberg has called "the most challenging year" in the company's history, while Wall Street seeks concrete signs of a turnaround going into 2002.

The world's largest hamburger maker is expected to post flat earnings for the fourth quarter and a decline for the year when it issues its results on Thursday, Jan. 24.

McDonald's earnings have been lower for four consecutive quarters amid sales pressure caused by outbreaks of mad cow disease, a fatal animal disorder, in Europe and Japan, as well as a strong U.S. dollar and weak global economies.

Analysts expect to see signs of improvement at the Oak Brook, Illinois-based company, which is restructuring its U.S. operations in an effort to jump-start sales and has been pushing red meat alternatives in troubled hamburger markets overseas.

I actually think that things are stabilizing to getting better," said Doug Christopher, a Crowell Weedon restaurant analyst. "We're going to start seeing more clean numbers going forward."

McDonald's said last month it expects to earn 34 cents a share in the quarter ended Dec. 31, excluding one-time items, the same as a year earlier. Including pretax charges of $235 million to $245 million, primarily associated with U.S. restructuring, quarterly results are pegged at 21 to 22 cents a year.

Full-year earnings are expected to be $1.36 a share, with analysts' forecasts ranging from $1.34 to $1.39 a share, according to Thomson Financial/First Call. McDonald's earned $1.46 a share in 2000.

Without an extra "penny or two" from a tax benefit in Australia, fourth-quarter results before charges would be 32 cents to 33 cents a share, according to Salomon Smith Barney analyst Mark Kalinowski.

Kalinowski, who rates McDonald's shares "neutral," said unusually warm winter weather in the United States, McDonald's largest market, might benefit the company by as much as a penny a share, pushing results before special items ahead of the 34-cent consensus to 35 cents.

McDonald's is likely to report positive sales at restaurants open at least one year in Western Europe, results that will probably be offset by weak results in its Asia/Pacific region, Kalinowski said.

Shares of McDonald's slipped 21 cents to $26.27 in early trading Friday on the New York Stock Exchange. The shares have fallen nearly 40 percent in the past year.