Updated from 12:17 p.m. EDT

McDonald's

(MCD) - Get Report

said Tuesday that its earnings rose 2% in the second quarter, meeting analysts' estimates, as strong sales in Asia and the company's other restaurants offset a decline in Europe and flat sales at home.

For the quarter ended June 30, net income totaled $525.9 million, or 39 cents a diluted share, consistent with Wall Street's expectations, according to a poll by

First Call/Thomson Financial

. That compares with net income of $518.1 million, or 37 cents a share, in the second quarter of 1999.

McDonald's closed up 1 1/16, or 3.5%, at 31 5/16.

Systemwide sales for the second quarter of 2000 totaled more than $10 billion, a 5% increase from $9.9 billion in a year earlier. Revenue rose 8% to $3.6 billion from $3.4 billion.

Sales in other restaurants owned by McDonald's -- Aroma Cafe, Chipotle Mexican Grill, Donatos Pizza and, effective May 26, Boston Market -- contributed $593 million, 29% more than $459 million in the second quarter of 1999.

Sales in the U.S. changed little from last year. In Europe, sales fell 3%, to $2.3 billion from $2.4 billion. Also, in the wake of exceptional non-food promotions in the U.S. and Europe in 1999, overall operating income fell 1%, to $875 million from $884 million, McDonald's said. During this past quarter, unusually hot weather and the popularity of the Euro 2000 Soccer Championship "reduced eating out activity," said Vice Chairman and President Jim Cantalupo.

"However, we remain confident that we will regain stronger sales momentum in the second half of the year and improve operating results," said Chairman and Chief Executive Officer Jack M. Greenberg in a statement. McDonald's, based in Oak Brook, Ill., said it opened 546 restaurants this year and remains on track to add between 1,800 and 1,900 by the end of 2000. Analysts expect the chain to earn $1.53 a share for the full year, according to First Call/Thomson Financial.

"We continue to believe McDonald's stock is undervalued and therefore have been an aggressive buyer," Greenberg said. During the second quarter, McDonald's bought about $700 million, or 19.1 million shares, of its stock, bringing the year-to-date total to nearly $1.3 billion. At this point, McDonald's has purchased $2.5 billion, or 70 million, of its shares under its $4.5 billion, three-year buyback program.