The relentless slide in the euro claimed a major corporate casualty in the U.S. on Thursday when a number of Wall Street investment banks lowered their earnings estimates for


(MCD) - Get Report

, the fast-food giant that derives much of its earnings from Europe.

The lowered appraisal raised concern that other big American multinational companies with extensive operations in the 11-nation zone of Europe that adopted the single currency last year could also suffer reduced earnings.

The euro, which began life at an exchange rate of about $1.17 to the dollar in January 1999, has slid fairly steadily since, and on Thursday hit a new lifetime low of 88.99 cents. For American companies, that means profits in euros translate into fewer dollars when repatriated.

Salomon Smith Barney

was among the investment banks that reduced its earnings estimate for McDonald's.

"Given McDonald's exposure to currency risk associated with a weaker euro, we now look for the overall currency impact on EPS this year to amount to

a loss of -$0.05 instead of -$0.02," said Mark Kalinowski, an analyst at Salomon Smith Barney. "As such, we are reducing our second, third and fourth quarter EPS forecasts for this year by one cent each."

McDonald's of Oak Brook, Ill. derives about 40% of its operating earnings from European sales. The company's shares closed regular Thursday trading down 1 9/16, or 4%, to 35 3/4.

Kalinowski reduced his earnings per share estimates for full-year 2000 to $1.54. He also lowered his estimate to $1.74 from $1.77 for 2001. Salomon Smith Barney rates McDonald's a buy and has done underwriting for the company.

Some analysts said earnings for the world's largest fast food chain, might be even lower. Stacy Jamar, an analyst at

Bank of America

, said she thought earnings would be in the range of $1.48 to $1.54 for the year.

"Our EPS estimate of $1.54 is at the high end of probable EPS and we would expect downward pressure on consensus of $1.57 toward, or potentially even below, our estimate," wrote Jamar, who rates McDonald's a market performer.

Donaldson, Lufkin & Jenrette

also reduced its earnings target due to currency weakness, but attributed their bearishness in part to "murky" fundamentals.

The cut in McDonald's estimated earnings also triggered expectations that other U.S. companies would face similar problems.

"Any company that derives large portions of its revenues form Europe is vulnerable right now," said Joseph Kalinowski, equity strategist at

I/B/E/S International


Kalinowski said that multinationals such as

Coca Cola

(KO) - Get Report



(CL) - Get Report

might also face similar problems.

Chuck Hill, director of research for

First Call/Thomson Financial

, said that in the scheme of things McDonald's might even fare better than other companies when it comes to euro weakness.

"If I'm McDonald's and I manufacture in Europe, then most of my costs are down as well as my revenues," said Hill. "But exporters are getting squeezed doubly -- their margins are decreasing as well as their profits."

Hill said that companies in the heavy industry and semiconductor sectors, which do most of the manufacturing in the U.S., could face negative earnings surprises that would be even more dramatic than those expected by analysts covering McDonald's.