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China division boosts Yum Brands profit

Yum Brands Inc., owner of the Taco Bell, KFC and Pizza Hut chains, said Wednesday its third-quarter profit rose 16 percent as the company’s China division flourished and U.S. same-store sales increased. It raised its full-year forecast.
/ Source: The Associated Press

Yum Brands Inc., owner of the Taco Bell, KFC and Pizza Hut chains, said Wednesday its third-quarter profit rose 16 percent as the company’s China division flourished and U.S. same-store sales increased. It raised its full-year forecast.

Net income grew to $214 million, or 72 cents per share, for the three months ended Sept. 3 from $185 million, or 61 cents per share, a year ago. Revenue rose 3 percent to $2.24 billion from $2.18 billion last year, with U.S. sales at stores open at least a year increasing 4 percent.

Analysts surveyed by Thomson Financial, on average, expected earnings per share of 70 cents on revenue of $2.24 billion.

More than a third of the company’s profit came from its rapidly growing China division. Profit rose 31 percent to $85 million, on an 18 percent revenue increase to $360 million.

In comparison, U.S. profits dipped 4 percent to $189 million, as revenue increased 2 percent from a year ago, to $1.39 billion.

The company forecast fourth-quarter earnings of 78 cents per share, excluding charges, and raised its earnings-per-share estimate for the year by 2 cents, to $2.64, excluding charges. For 2006, the company estimates earnings-per-share growth of 10 percent.

Analysts estimate earnings of 78 cents per share in the fourth quarter, $2.63 for the year, and $2.89 in 2006.