Shares of McDonald's advanced nearly 4 percent Monday afternoon after the company gave a positive earnings outlook and said its international business is strong.
Newly-appointed Chief Executive Jack Greenberg said he sees "strong growth in operating income for the rest of 1998." His comments come just three weeks after McDonald's warned investors that it expects slower sales.
Greenberg also said in a statement that McDonald's completed a $2 billion-share buyback program but will continue to purchase more shares in a fresh multi-year buyback plan to be established officially in the next few months.
McDonald's stock, a component of the Dow Jones Industrial Average, rallied 1 13/16 to 62 15/16 on the news.
The company is in line to increasing earnings per share by 10 percent to 15 percent each year for five years, with the exception of foreign currency, McDonald's said. In its second-quarter report, the company blamed a strong U.S. dollar and weak foreign currencies for its expected 1998 second-half sales shortfall.
However, Greenberg said international growth has "strong fundamentals" and will likely have another record year despite the problems in Asia. Its business in the United States "continues its positive momentum," Greenberg said.
Written By Tiare Rath