McDonald's said on Monday it expects to report quarterly earnings above Wall Street estimates on its strongest quarterly sales in three years.
But the company also said that including a previously announced charge related to a Latin American business sale, it would post a net loss for the quarter.
The sales and operating earnings forecast are the latest signs that McDonald's focus on new products like premium iced coffee in the United States and western-style breakfast options in China has carried it well past the slump it saw earlier this decade.
"While consensus is positive on McDonald's, we believe McDonald's ongoing transition to steady and sustainable growth is still underappreciated," UBS analyst David Palmer said in a research note.
The world's largest restaurant chain operator said it expected to earnings of 71 cents per share before costs related to the sale of businesses in Latin America.
Analysts, on average, had been expecting earnings of 67 cents a share, excluding one-time items, according to Reuters Estimates.
In April, McDonald's said it would sell about 1,600 restaurants in Latin America and the Caribbean to a franchisee. Including the impact of this sale, the company will post a net loss of 60 cents a share in the second quarter.
Second-quarter sales at restaurants open at least 13 months rose 7.4 percent, the company said.
The world's largest restaurant company also said June sales at outlets open at least 13 months rose 8.4 percent, helped by strong breakfast sales in America.
Three Wall Street analysts' June same-store sales estimates ranged from a rise of 4 percent to an increase of 7 percent, according to research notes.
U.S. same store sales rose 4.2 percent, with strength continuing in its breakfast business. The three analysts forecast U.S. same-store sales rising 3.5 percent to 5 percent.
Chicken snack wraps, premium iced coffee and strength in breakfast helped lift U.S. sales, the company said.
Same-store sales rose 11.1 percent in Europe and 12.1 percent in Asia/Pacific, Middle East and Africa, the company said.
Sales in Europe were helped by the P'tit Plaisir line of smaller sandwiches in France, while Asia was again lifted by sales of sausage McMuffins, hotcakes and other western-style breakfast items.
McDonald's shares were up 10 cents to $52.01 in midday trading on the New York Stock Exchange. The stock is up 17 percent this year, compared with a 4 percent increase by the Dow Jones U.S. restaurants and bars index.
"I would say McDonald's is close to being fully valued," said Janna Sampson, director of portfolio management at Oakbrook Investments in Lisle, Illinois, which holds about 400,000 McDonald's shares. "But then again, if they can continue to put these numbers up, there might be more upside than I think."