Strong international sales helped
come up with the recipe to beat Wall Street's fourth-quarter earnings expectations.
The Louisville, Ky.-based restaurant operator, whose brands include KFC, Pizza Hut, and Taco Bell, said Monday that it earned $232 million or 83 cents a share, in the quarter. A year earlier, earnings were $226 million, or 77 cents a share.
Revenue rose slightly to $3.02 billion from $2.9 billion a year earlier.
Analysts polled by Thomson Financial projected earnings of 79 cents and sales of $2.9 billion.
Worldwide same-store sales, or sales at stores open at least a year, grew 3%.
Blended same-store sales in the U.S. slipped 2%, primarily due to a 5% same-store sales drop at Taco Bell. The chain was hit by an E. Coli outbreak at some stores in the Northeast, which cut into sales during the quarter.
Sales at Yum!'s China division increased 23% in local-currency terms, the company said, due to the continued expansion of both KFC and Pizza Hut brands in mainland China.
The restaurants in mainland China recorded fourth-quarter same-store-sales growth of 12%, and unit growth of 18%.
For the full year, Yum!'s earnings rose to $824 million, or $2.92 a share, from $762 million, or $2.55 a share, in 2005. Revenue increased 2% to $9.56 billion.
For 2007, the company said it continues to expect earnings per share of at least $3.21. Wall Street is looking for earnings of $3.22 a share for 2007.
"As we look ahead to our expectations for 2007, we remain confident we can continue to build on our track record of growing EPS at least 10% each year by generating 20% operating profit growth from our China Division, 10% from our YRI Division and 5% from our U.S. businesses," said David C. Novak, chairman and CEO, in a statement.