Updated from 8:37 a.m. EST

Strong December sales led McDonald's ( MCD) to boost its fourth-quarter earnings estimate Wednesday.

The Oak Brook, Ill.-based fast-food giant said global same-store sales rose 7.2% in December. Worldwide comps for the entire quarter surged 6.3%.

The company said it expects fourth-quarter earnings to be $1 a share, including 61 cents of income from continuing operations and a 39-cent gain. On average, analysts polled by Thomson Financial had forecast earnings from continuing operations of 58 cents.

Same-store sales in the U.S. rose 6.9% for December. McDonald's noted particular strength in demand for its breakfast lineup and Snack Wrap and chicken products.

European comps rose 8.2% last month, and the continent generated a 5.8% same-store sales increase for the entire year, its best annual result in nearly 15 years.

For all of 2006, McDonald's posted a global same-store sales increase of 5.7%, with a 5.2% jump in the U.S.

Malcolm Knapp, a restaurant industry consultant, says McDonald's has been successful in attracting customers from a variety of income levels by touting products ranging from dollar-menu items for less-affluent consumers to gourmet-style salads for wealthier patrons.

"They've really repositioned themselves as a concept so they can appeal to a broad demographic," he says.

While McDonald's had a strong year in 2006, 2007 could be more of a challenge as Starbucks ( SBUX) moves in on the Golden Arches' territory, Knapp says. Starbucks has been looking to add breakfast sandwiches to its menu.

McDonald's, though, has encroached on Starbucks' domain by introducing premium coffee. McDonald's also is renovating certain stores to look like a cross between Starbucks and a Panera Bread ( PNRA) bakery-café, Knapp says.

Shares of McDonald's recently were up 41 cents to $44.98.

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