McDonald's

(MCD) - Get Report

said Monday that it will cut capital spending and open fewer restaurants in 2003, in order to improve its sagging financial results.

"We are committed to lower levels of capital spending until we have achieved a significant improvement in sales, margins and returns," said the company's chairman and chief executive, Jim Cantalupo, in a conference with investors in New York.

TST Recommends

McDonald's, which operates 30,000 restaurants worldwide, expects $1.2 billion worth of capital expenditures, below initial estimates of $1.9 billion and less than the $2 billion it spent in 2002. The restaurant chain also plans to add 360 stores worldwide, down from more than 1,000 last year.

For 2005 and beyond, the company projects annual sales will grow 3% to 5%, with 2% coming from new restaurants and the rest from existing stores.

Analysts expect McDonald's to have a first-quarter profit of 29 cents a share before items, below the 31 cents from the previous year, according to Thomson Financial/First Call. The company reported its first quarterly loss in January.