Yum profit beats as China sales fall less than forecast

Is Yum Brands turning a corner?

Yum Brands shares rallied on Tuesday after the restaurant operator topped earnings expectations as comparable sales in China declined less than forecast.

Yum, which operates KFC, Pizza Hut and Taco Bell restaurants, reported first-quarter earnings of 80 cents per share on revenue of $2.62 billion.

Same-store sales in China, a key division for the company, fell 12 percent during the quarter after allegations that a former supplier used expired meat.

The company's China unit has been especially hard hit this year because of a supplier scare last summer. Analysts expect same-store sales in the country to shrink 14.4 percent.

Analysts had expected Yum Brands to report earnings of 72 cents a share on $2.64 billion in revenue, according to a consensus estimate from Thomson Reuters.

What is Yum Brands stock doing now? (Click here to track its shares.) Shares rose about 4 percent in after-hours trading.

Same-store sales in the Yum's Taco Bell unit rose 6 percent, better than the 5.4 percent analysts expected. Comparable store sales at its KFC restaurants rose 5 percent, versus expectations of a 3.1 percent increase, while Pizza Hut comps were flat.