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Yum Brands Boosted by China

October 12, 2006|From Reuters

Fast-food company Yum Brands Inc. posted a 12% rise in fiscal third-quarter earnings and boosted its outlook for the year as strong performances in China and other foreign markets offset weaker sales in the U.S.

Net income for the quarter ended Sept. 9 rose to $230 million, or 83 cents a share, from $205 million, or 69 cents, a year earlier. Revenue edged up to $2.28 billion from $2.24 billion, despite a slide in U.S. sales for the quarter.

The results handily beat Wall Street analysts' average profit forecast of 75 cents a share.

Yum, based in Louisville, Ky., operates more than 34,000 fast-food restaurants -- including KFC, Pizza Hut and Taco Bell chains -- in more than 100 countries.

Sales at Yum's U.S. restaurants open at least a year fell 2%, partly because of tough comparisons at Taco Bell against strong year-earlier results and stiff competition from Pizza Hut rivals Domino's Pizza Inc. and Papa John's International Inc.

Profit at Yum's fast-growing business in China rose 26% in the quarter. Yum has nearly 1,700 KFC restaurants and 261 Pizza Huts in China and is the country's largest restaurant chain operator.

Earnings rose 22% in its international business, which excludes China.

For the full year, Yum raised its earnings projection to $2.89 a share from at least $2.83. Analysts on average had expected earnings of $2.84 a share, according to Reuters Estimates.

Yum shares fell 19 cents to $54.57 in regular trading, then rose to $56 after hours.

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