Yum Brandsreported a profit that outstripped Wall Street's forecasts Wednesday, as strong sales in China pushed earnings higher even as the company faced rising labor and food costs there.
The operator of KFC, Taco Bell and other fast food chains said it earned 63 cents a share in the fourth quarter of 2010, excluding one-time items, compared with 50 cents a share last year.
Sales rose to $3.56 billion, from $3.365 billion.
The results topped analysts' estimates, which stood at a profit of 60 cents a share and revenue of $3.5 billion, according to Thomson Reuters.
The company's operating profit in the U.S., where it has struggled as recession-weary consumers remain at home more often to eat, rose 15 percent. And Pizza Hut's sales at U.S. restaurants open at least a year—a key barometer for restaurant performance—rose 10 percent. The figure also rose for Taco Bell and KFC.
Yum shares, which closed at $47.73 on the New York Stock Exchange , rose in late trade Wednesday. Get after-hour quotes for Yum Brands here.
Fourth-quarter net income at Yum, based in Louisville, Kentucky, was $274 million, or 56 cents per share, compared with $216 million, or 45 cents per share, a year earlier. Net income includes special items.
Chairman and CEO David C. Novak said 2010 was "perhaps our best year as a public company."
"As we enter 2011, we know that we face commodity inflation and a global economy that is still recovering," he said in a statement.
Yum now gets more than a third of its revenue from China, the world's fastest growing economy.
In its crucial China business, fourth-quarter operating profit rose 15 percent, adjusted for currency fluctuations; operating profit rose 18 percent in Yum's other international business. Across its U.S. operations, fourth-quarter operating profit rose 15 percent.
Yum recently announced that it is putting its Long John Silver's and A&W restaurant chains up for sale so it can focus on its growing international business.