Yum! Brands is scheduled to release Q12010 earnings after the closing bell on Wednesday, April 14, 2010. Analysts, on average, expect the company to report earnings of $0.52 per share in the first quarter with estimates ranging from a low of $0.48 to a high of $0.55 per share. Revenues for the quarter are estimated to be $2.25 billion. In Q12009, the company reported earnings of $0.48 per share on revenue of $2.22 billion.Yum! Brands, Inc. operates as a quick service restaurant company. The company develops, operates, franchises, and licenses a system of restaurants, which prepare, package, and sell various food items. The company has more than 36,000 restaurants in more than 110 countries and territories.
In the preceding Q42009, the Louisville, Kentucky-based company reported that its net income rose 6% to $216 million, up 6% from $204 million in the year-ago quarter. Net income on a per share basis increased 5% to $0.45 from $0.38 in the prior-year period. On an adjusted basis, the company earned $0.50 per share compared to $0.46 per share in the same quarter last year. Revenue decreased 1% to $3.37 billion from $3.39 billion in the prior-year quarter. Analysts, on average, expected the company to report earnings of $1.71 per share on revenue of $3.34 billion.
The company expects to achieve annual earnings growth of approximately 25% in 2010 benefiting from international new unit development, disciplined cost management, modest same-store-sales growth and favorable foreign currency translation. During 2010, Yum intends to add 1,400 new stores in mainland China and internationally. The retailer also intends to increase operating profit in China by 15%, from $117 million to $135.5 million, internationally by 10%, from $131 million to $146.1 million, and in the U.S. by 5%, from $211 million to $221.5 million.
The restaurant chain operator has enjoyed strong growth in international markets in recent years. Yum Brands has particularly gained immensely from growing Chinese appetite for American fast food. China's growing middle class and rising per capital income offers tremendous potential for further growth of the company. The company has more than 3,000 stores in china and aims to open more than 20,000 restaurants in China. China division's total revenues rose 17% to $1.21 billion in the fourth quarter from $1.03 million a year earlier and operating profit jumped 24% to $149 million from $120 million last year. The company opened 205 new restaurants in mainland China for the fourth quarter for a total of 509 for the full year.
Meanwhile, the company opened its first Taco Bell location in India in March. India is a key growth market for Yum! Brands due to its extremely young and large population of 1.1 billion people, growing middle class and emerging economy. Over the past 12 years, Yum! has registered strong growth in India by successfully developing a strong infrastructure, highly-skilled workforce focused on providing outstanding customer service and innovative, localized menus offering value options. By 2015, the Company expects to have at least 1,000 restaurants in India, up from 230 restaurants as of year-end 2009. KFC is one of the fastest growing quick-service restaurant brands in India with 72 restaurants in 13 cities as of year-end 2009. Yum! opened 27 new KFC restaurants in India in 2009, which is among the highest number of store openings in the country's quick-service restaurant industry.
However, the fast food chain is facing pressure in United Sates as heightened competition and escalating price- war in fast food space could erode the company's bottomline.
Among other developments during the quarter, the company declared a quarterly dividend of $0.21 and said hat its board has authorized the repurchase of an additional $300 million worth of shares, over the next 12 months in addition to the $300 million authorized in September 2009, of which about $130 million has been utilized during the year.
In terms of stock performance, Yum shares have gained nearly 16 percent since the beginning of the year.
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