Yum! Brands, Inc. (NYSE: YUM): Q2 Earnings Preview 2011

Yum! Brands, Inc. (NYSE: YUM) is scheduled to release its second-quarter earnings after the closing bell on Wednesday, July 13, 2011. Analysts, on average, expect the company to report earnings of 61 cents per share on revenue of $2.70 billion. In the year ago period, the company reported earnings of 58 cents per share on revenue of $2.57 billion.

YUM! Brands, Inc., together with its subsidiaries, operates as a quick service restaurant company worldwide. Through the five concepts of KFC, Pizza Hut, Taco Bell, LJS and A&W (the Concepts), the Company develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of food items.

The company has seen net income rise in three straight quarters.R evenue has risen in the past four quarters. 

In the preceding first quarter, the Louisville, Kentucky-based company's net income was $264 million, or 54 cents a share, compared to $241 million,or 50 cents a share, in the year-earlier quarter. On an adjusted basis, the company earned 63 cents a share in the latest quarter. Revenue increased 3% to $2.43 billion from $2.34 billion. Analysts, on average, expected the company to report earnings of 64 cents per share on revenue of $2.40 billion.

The company expects to deliver double-digit EPS growth in 2011, excluding special items, which would mark its 10th straight year of meeting or exceeding this annual EPS growth target.

The restaurant chain operator has enjoyed strong growth in international markets in recent years. It opened 507 new restaurants in China and 884 in other countries outside the U.S. last year. 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. At the time of its spin off from PepsiCo, just 22% of its profit came from international operations, a figure that has since nearly tripled to 65% and is expected to hit 75% by 2015. Yum's China business is very lucrative, with margins topping 20 percent.Yum has built KFC into a leading fast-food brand in China, and the chain's same-store sales in China rose 5 percent for the year, benefiting from initiatives that included breakfast offerings, delivery and 24-hour operations. "We're well on our way to our China business becoming a $1 billion operating profit division for us in the very near future," Yum spokesman Jonathan Blum said recently in an interview.

The company expects China to surpass United States as the fast-food restaurant operator's top profit generator this year, even as the Chinese market's potential remains largely untapped. Yum has more than 3,900 restaurants, mostly KFC outlets, in China and has a big lead over Western rivals like McDonald's Corp (NYSE: MCD) in the world's fastest-growing major economy. The company aims to open more than 20,000 restaurants in China. The company opened 507 new restaurants in China last year. Apart from China, the company is also expanding in new markets including India, France, Russia and Africa.

Yum recently announced that it will seek to buy all outstanding shares in hotpot-restaurant operator Little Sheep Group Ltd. to further expand in China. Yum may bid for all shares that it doesn’t already own or are held by parties acting in concert with it. The U.S. restaurant operator increased its Little Sheep stake to 27.2 percent from 20 percent last year. Little Sheep’s 2010 net income gained 21 percent.

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. Moreover, costs for labor and commodities like chicken are on the rise and could bite into profits.

The company's stock currently trades at a forward P/E (fye Dec 25, 2012) of 17.24 and PEG ratio (5 yr expected) of 1.54. In terms of stock performance, Yum shares have gained nearly 12 percent since the beginning of the year.  

Full Disclosure: None.

Yum! Brands, Inc. (NYSE: YUM): Q1 Earnings Preview 2011

Yum! Brands, Inc. (NYSE: YUM) is scheduled to release its first-quarter earnings after the closing bell on Wednesday, April 20, 2011. Analysts, on average, expect the company to report earnings of 64 cents per share on revenue of $2.40 billion. In the year ago period, the company reported earnings of 59 cents per share on revenue of $2.34 billion.

YUM! Brands, Inc., together with its subsidiaries, operates as a quick service restaurant company worldwide. Through the five concepts of KFC, Pizza Hut, Taco Bell, LJS and A&W (the Concepts), the Company develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of food items.

In the preceding fourth quarter, the Louisville, Kentucky-based company's net income was $274 million or $0.56 per share, compared to $216 million or $0.45 per share in the year-ago quarter. On an adjusted basis, the company earned 63 cents a share in the fourth quarter. Revenue rose to 6% $3.56 billion from $3.37 billion in the same quarter last year. Analysts, on average, had expected the company to report earnings of 60 cents a share on revenue of $3.50 billion. 

The company expects to deliver double-digit EPS growth in 2011, excluding special items, which would mark its 10th straight year of meeting or exceeding this annual EPS growth target.

The restaurant chain operator has enjoyed strong growth in international markets in recent years. It opened 507 new restaurants in China and 884 in other countries outside the U.S. last year. It operates more than 37,000 restaurants around the world.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. At the time of its spin off from PepsiCo, just 22% of its profit came from international operations, a figure that has since nearly tripled to 65% and is expected to hit 75% by 2015. Yum's China business is very lucrative, with margins topping 20 percent.Yum has built KFC into a leading fast-food brand in China, and the chain's same-store sales in China rose 5 percent for the year, benefiting from initiatives that included breakfast offerings, delivery and 24-hour operations. "We're well on our way to our China business becoming a $1 billion operating profit division for us in the very near future," Yum spokesman Jonathan Blum said recently in an interview.

The company expects China to surpass United States as the fast-food restaurant operator's top profit generator this year, even as the Chinese market's potential remains largely untapped. Yum has more than 3,900 restaurants, mostly KFC outlets, in China and has a big lead over Western rivals like McDonald's Corp (NYSE: MCD) in the world's fastest-growing major economy. The company aims to open more than 20,000 restaurants in China. The company opened 507 new restaurants in China last year. Apart from China, the company is also expanding in new markets including India, France, Russia and Africa.

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. Moreover, costs for labor and commodities like chicken are on the rise and could bite into profits.

The company's stock currently trades at a forward P/E (fye Dec 25, 2012) of 16.14 and PEG ratio (5 yr expected) of 1.79. In terms of stock performance, Yum shares have gained nearly 8 percent over the past year.  

Full Disclosure: None.

Yum! Brands, Inc. (NYSE: YUM): Q4 Earnings Preview 2010

Yum! Brands, Inc. (NYSE: YUM) is scheduled to release its fourth-quarter earnings after the closing bell on Wednesday, February 2, 2011. Analysts, on average, expect the company to report earnings of 60 cents per share on revenue of $3.50 billion. In the year ago period, the company reported earnings of 50 cents per share on revenue of $3.36 billion.

YUM! Brands, Inc., together with its subsidiaries, operates as a quick service restaurant company worldwide. Through the five concepts of KFC, Pizza Hut, Taco Bell, LJS and A&W (the Concepts), the Company develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of food items.

In the preceding third quarter, the Louisville, Kentucky-based company's net income was $357 million, or 74 cents a share, compared to $334 million, or 69 cents a share, in the year-ago quarter. On an adjusted basis, the company earned 73 cents a share in the latest quarter. Revenue rose to $2.86 billion from $2.78 billion in the same quarter last year. Analysts, on average, had expected the company to report earnings of 73 cents a share on revenue of $2.87 billion. 

At its last earnings call in October, the restaurant operator boosted its 2010 earnings guidance to $2.48 per share from its prior outlook of $2.43 per share. In December, the company reaffirmed that it is on track to post 14 percent earnings-per-share growth in 2010, helped by new restaurant openings in China and its other international markets.

The company expects to deliver at least 10 percent EPS growth in 2011, excluding special items, which would mark its 10th straight year of meeting or exceeding this annual EPS growth target.

Recently, the company's board approved the share repurchase of an additional $750 million.  Yum will buy back shares over the next 18 months. The company currently has $130 million of share buyback remaining under the $300 million share repurchases authorized by the board in March 2010. Year to date, ended September 4, 2010, Yum repurchased $7.6 million for a total of $283 million.  Since 2004, the company has returned over $1 billion and $6 billion via dividend and share repurchase programs, respectively.

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. At the time of its spin off from PepsiCo, just 22% of its profit came from international operations, a figure that has since nearly tripled to 65% and is expected to hit 75% by 2015. Yum's China business is very lucrative, with margins topping 20 percent.

Recently, the company said that China would surpass the United States as the fast-food restaurant operator's top profit generator this year, even as the Chinese market's potential remains largely untapped. Yum has more than 3,700 restaurants, mostly KFC outlets, in China and has a big lead over Western rivals like McDonald's Corp (NYSE: MCD) in the world's fastest-growing major economy. The company aims to open more than 20,000 restaurants in China.

Yum!'s chief of India operations said in November he expects revenue to grow between 35% and 45% in 2011. Comparable same-store sales, or sales at stores open at least one year -- a closely watched metric in the restaurant industry -- should increase in the mid-teen percentages, Niren Chaudhary told Reuters at the World Economic Forum's India summit. 

Yum expects to build 475 new restaurants in China next year and 900 outlets in its other international markets, from Europe to Asia and Africa.

Yum Brands recently announced that it has put restaurant chains Long John Silver's and A&W All-American Restaurants up for sale as it pushes to expand in international markets. Yum! said the divestments come as it narrows its focus for long-term growth plans toward greater expansion in China and other international markets while concurrently growing sales at Taco Bell, Pizza Hut and KFC in the U.S. Yum! said that it "does not expect the eventual sale to have a material impact to its ongoing earnings or cash flow."

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. Moreover, costs for labor and commodities like chicken are on the rise and could bite profits.

Full Disclosure: None.

Yum! Brands Inc. (NYSE: YUM): Q1 Earnings Preview 2010

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.

Full Disclosure: None.

Yum! Brands Inc. (NYSE: YUM): Q4 Earnings Preview 2009

Yum! Brands Inc. (NYSE: YUM), owner of fast-food joints KFC, Taco Bell, and Pizza Hut, is scheduled to release its fiscal fourth quarter 2010 earnings after the closing bell on Wednesday, February 3, 2010. Analysts, on average, expect the company to report earnings of 48 cents a share on revenue of $3.33 billion. In the year ago quarter, the company reported earnings of 46 cents per share on revenue of $3.38 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 third quarter, the Louisville, Kentucky-based company reported that its profit rose 18% from last year, helped by strong profit growth in China and the U.S. Net income for the third quarter of $334 million or $0.69 per share, compared to $282 million or $0.58 per share for the year-ago period. Excluding special items, the latest quarter adjusted earnings were $0.70 per share. Revenue for the third quarter declined 2% to $2.78 billion from $2.84 billion in the same quarter last year. Analysts, on average, expected the company to earn $0.58 per share on revenue of $2.79 billion.

The company delivered a 15% increase in operating profit for the third quarter before special items, including impressive 32% growth in China and 18% growth in the United States.On the downside, Yum Brands reported a 6 percent decrease in same-store sales in the third quarter. Pizza Hut posted a 13 percent drop in U.S. sales at restaurants open more than a year.

Yum! Brands expects its full-year 2009 system sales growth, excluding foreign currency translation, is estimated to be 9% in mainland China and 5% in YRI. The company also sees same-store-sales decline of 4% in the U.S. In addition, full-year negative foreign currency translation impact is expected to be about $45 million.

For the fourth quarter, the company's same-store-sales performance is projected to be down 3% in mainland China, 1% in YRI and 8% in the U.S.

For fiscal 2010, the company plans to deliver at least 10% earnings per share growth, 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.

In December, the restaurant chains operator affirmed its adjusted earnings per share growth of 12% for fiscal 2009. The company also sees fiscal 2010 earnings per share growth excluding special items of at least 10%.

The company has benefited due its strong global portfolio. 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 about 3,000 stores in china, which contributed 27.7 percent to the total revenue in 2008. Yum Brands aims to open more than 20,000 restaurants in China. Recently, the company outlined its growth plans for India. Yum Brands intends to open 1,000 fast-food outlets by 2015.

However, the fast food chain may face pressure as heightened competition and escalating price- war in fast food space could erode the company's bottomline.

Among other developments, in November, Yum! Brands Inc. declared a dividend of $0.21 per share of common stock, which will be distributed February 5, 2010, to shareholders of record at the close of business on January 15, 2010.

The company's stock currently trades at a forward P/E (fye 27-Dec-10) of 14.37 and PEG ratio (5 yr expected) of 1.33. In terms of stock performance, Yum shares have gained 24 percent over the past year.

Full Disclosure: None.

McDonald's Corp. (NYSE: MCD): Q4 Earnings Preview 2009

McDonald's Corp. (NYSE: MCD) is scheduled to release its fourth quarter earnings for 2009 before the market open on Friday, January 22, 2010. Analysts, on average, expect the company to report earnings of $1.02 per share on revenue of $5.93 billion. In the year ago period, the company reported earnings of 87 cents per share on revenue of $5.57 billion.

McDonald's Corporation, together with its subsidiaries, franchises and operates McDonald's restaurants in the food service industry worldwide. Its restaurants offer various food items, soft drinks, and coffee and other beverages. The company runs more than 32,000 restaurants in more than 100 countries.

The fast-food restaurant chain benefited from recession amid continued emphasis on its core menu, branded affordability, breakfast and convenience. In October, the Oak Brook, Illinois-based company reported that its third-quarter net income advanced 6% to $1.26 billion from $1.19 billion in the prior-year quarter. On a per share basis, earnings totaled $1.15, up 10% from the previous year's $1.05. Quarterly revenue dropped 4% to $6.05 billion from $6.27 billion reported a year ago. Analysts, on average, expected the company to report earnings of $1.11 per share on revenue of $6.10 billion.

It appears that McDonald’s growth is finally cooling. Though the company has been reporting rise in same-store sales over the past months and has been faring better than its competitors, the persistent weakness in US market is now hurting the business of one of the world’s most recognizable brands. Last month, the McDonald's reported said sales at restaurants open at least a year fell 0.6 percent in the U.S in November as elevated unemployment levels curtailed sales. It was the second consecutive monthly decline for the measure, an important indicator of a restaurant chain's health, and a steeper fall than October's 0.1 percent.

The company is also feeling the heat of heightened competition from other fast food chains such as Burger King (NYSE: BK), Taco Bell (NYSE: YUM) and others who have increasingly been pushing value menus and discounts of their own. Meanwhile, as competitors take aim at McDonald’s value options, McDonald’s continues to promote their McCafe coffee drinks as a cheap alternative to competitors like Starbucks (NASDAQ: SBUX).

For the fourth quarter, McDonald's expects recording approximately $85 million of after tax income, a roughly $0.08 per share benefit, primarily due to the resolution of certain liabilities retained in connection with the 2007 Latin America developmental license transaction.

The company's stock currently trades at a forward P/E (fye 31-Dec-10) of 14.12 and PEG ratio (5 yr expected) of 1.66. In terms of stock performance, McDonald's shares have gained nearly 8% since over the past year.

Full Disclosure: None.