In a reversal of fortunes from year end 2002, McDonald’s Corporation (NYSE: MCD) today announced earnings per share of $0.29, up 7%, for first quarter 2003.

Revenues increased 6% at $3.8 billion and systemwide sales increased 5% to $10.2 billion. The weak spot was in same store sales which decreased 2% for U.S. stores and 3.6% worldwide in constant currencies.

Chairman and Chief Executive Officer Jim Cantalupo said, “I certainly am not satisfied with our results this quarter. Yet, I am confident we are getting the business back on track. We are moving ahead with plans to revitalize McDonald’s business everywhere. And we’ve made a strategic shift to concentrate on building sales at existing restaurants rather than adding new ones.”

The company reiterated its budget reduction of $800 million in capital expenditures from the $2 billion spent in 2002 as it focuses on existing stores. Net of closings, worldwide restaurant additions in 2002 totaled 1,015 whereas 2003 will only see 360 net new openings.

McDonald’s expects sales from new restaurants to add approximately two to three percentage points to sales growth in 2003, mostly as a result of restaurants opened in 2002.

By shifting cash away from new restaurant builds, McDonald’s expects to decrease its debt level in 2003 by $300 million to $700 million and increase its shareholder dividend above the current 24 cents.

Investors were pleased with the better than expected results. McDonald’s stock price closed up 7% at $16.93, the highest level since January.