Tasty Quarter from Yum! Brands - TheStreet

Tasty Quarter from Yum! Brands

The Taco Bell and Pizza Hut owner beats estimates and raises full-year profit targets.
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Yum! Brands

(YUM) - Get Report

delivered better-than-expected earnings and lifted its targets for the year, boosted by continued strength in demand internationally.

The owner of the Taco Bell, Pizza Hut and KFC chains said second-quarter earnings jumped to $214 million, or 39 cents a share, from $192 million, or 34 cents a share, a year earlier.

Revenue rose to $2.37 billion from $2.18 billion a year ago.

Analysts polled by Thomson Financial projected earnings of 36 cents a share and revenue of $2.28 billion.

The results were driven by strength overseas, where Yum! derives a big portion of its sales. System same-store sales rose 7% in China and 5% in Yum!'s international division, which includes restaurants in foreign areas other than China. In the U.S., however, same-store sales were flat.

Yum! also said its bottom line was helped by a lower tax rate, which fell to 21.5% from 29% last year.

For the full year, Yum! sees earnings of at least $1.63 a share, up from its prior forecast of $1.62. That suggests 12% EPS growth for the year, up from its original projection for 10% growth.

The forecast brings the company's guidance in line with analysts' average estimate of $1.63, according to Thomson.

Shares of Yum! Brands jumped Wednesday after UBS upgraded the stock to buy from neutral, noting its strong international presence and potential for growth. The stock was rising another 66 cents, or 1.9%, to $35.07 in after-hours trading.