Net income at Yum! Brands up 17%

by FoodBusinessNews.net Staff
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LOUISVILLE, KY. — The international segments of Yum! Brands, Inc. were essential in helping the company achieve 17% growth in net income during the third quarter.

For the quarter ended Sept. 8, net income was $270 million, equal to 52c per share on the common stock, compared with $230 million, or 43c per share, during the same quarter of 2006.

Total revenue was $2.564 billion, up 13% compared with $2.278 billion during the same quarter of the previous year.

"I am very pleased that we were once again able to demonstrate the power of our global portfolio to generate consistent growth," said David C. Novak, chairman and chief executive officer. "Driven by outstanding operating performance in our international businesses, China and YRI, we were able to deliver 16% growth in operating profit and 20% e.p.s. growth for the third quarter."

The U.S. division posted an operating profit of $187 million, up slightly compared with $183 million during the same quarter of the previous year. The U.S. business also posted revenue of $1.224 billion in the quarter, down 6% compared with $1.3 billion during the same quarter of the previous year.

"Our U.S. business performance improved versus the first half of the year, however, sales and profit growth remains below our target level due to results at Taco Bell," Mr. Novak said. "For the fourth quarter, we expect improved Taco Bell results, solid U.S. profit growth, and strong overall profit growth from the Yum! global portfolio."

The company’s China division had an operating profit of $135 million in the quarter, up 28% compared with $105 million in the previous year. Revenue was up 31% to $600 million in the quarter compared with $460 million during the same quarter of the previous year.

The International division posted an operating profit of $127 million, up 21% compared with $105 million during the same quarter of the previous year. Revenue during the quarter was $740 million, up 43% from $518 million during the same quarter of the previous year.

The company also announced it has raised its full-year e.p.s. growth forecast to 13%, up from 12%, due to the growth in the China and YRI divisions. The full-year e.p.s. forecast is now $1.65 per share.

For the nine months ended Sept. 8, net income was $678 million, equal to $1.28 per share, up 15% compared with $592 million, equal to $1.09 per share, during the same period of the previous year.

Revenue for the nine months was $7.154 billion, up 9% from $6.545 billion during the same period of the previous year.

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