Yum! Brands up after Reporting Strong Earnings

Yum! Brands Inc. (NYSE:YUM) shares up over 2% in morning trade and close to a 52 week high after the company reported profits and revenues for its December quarter that exceeded analyst estimates. The company reported fourth quarter 2011 adjusted earnings of 75 cents per share, up 33% year over year. The results beat analyst consensus estimates by a penny.

The company said it expects full year 2012 EPS growth of at least 10%. The company reported revenue of $3.27 billion up 15% from a year ago. This also was significantly higher than analyst estimates that were looking for quarterly revenues of $3.09 billion.

The company’s performance was boosted by a strong showing in China where the company had 327 new restaurant openings. Comparable-restaurant sales (comps) improved 21% in mainland China. Comps nudged up 1% in the U.S., with 6% rise at Pizza Hut partially offset by a respective 2% and 1% decline at Taco Bell and KFC.

David C. Novak, Chairman and CEO said, “I’m pleased to report full-year EPS growth of 14%, making 2011 the tenth consecutive year we exceeded our annual target of at least 10%.We continue to focus on three key elements that drive the value of our company: new-unit development, same-store sales growth, and high returns. Our new-unit potential in emerging markets is arguably the best in the restaurant industry. To put this in perspective, today we have fewer than two restaurants per million people in the top 10 emerging markets compared to nearly 60 restaurants per million people in the U.S. Clearly, we have a very long runway for growth”.

“To fully maximize the value of our existing asset base of 37,000 restaurants, we are introducing sales layers like breakfast, expanded beverages and new product platforms. Finally, we continue to be disciplined with capital as we invest in high-return growth opportunities around the world, along with paying a meaningful dividend and making significant share repurchases. Our return on invested capital of over 22% is among industry leaders and has improved for eight consecutive years” he added.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.