Yum Brands Earnings Top Forecasts; Stock Jumps
Yum Brands reported first-quarter earnings on Tuesday that beat analyst expectations, while revenue was just short of forecasts.
Shares of the company, which operates fast-food chains including Pizza Hut, KFC and Taco Bell, popped more than 7 percent after the closing bell, following the news. What is Yum stock doing now? (Click here for the latest after-hours quote.)
That rise is despite a 20-percent drop in quarterly sales at established restaurants in China, in-line with analyst estimates. The company warned that fears surrounding the country's bird flu outbreak was damaging sales already down due to a food safety scare.
The drop in sales was a major contributor to the first quarter's profit decline to $337 million from $458 million a year earlier.
Earnings excluding items decreased to 70 cents per share from 76 cents a share in the year-earlier period.
Revenue eased 7 percent to $2.54 billion from $2.74 billion a year ago.
Analysts had expected the company to report earnings excluding items of 60 cents a share on $2.56 billion in revenue, according to a consensus estimate from Thomson Reuters.
The company has some 5,300 locations—mostly KFCs—in China, a key growth market where it makes more than half of its overall sales. In late December Chinese food safety authorities said KFC was supplied with chicken that contained excess amounts of antibiotics. Also, publicity surrounding a new strain of bird flu is having a negative impact on KFC sales there.