Earnings Coverage - Yum! Brands

LONDON, October 10, 2014 /PRNewswire/ --

Investor-Edge.com has issued free earnings coverage on Yum! Brands Inc. (NYSE: YUM). On October 07, 2014, the company reported its financial results for Q3 FY14 (period ended September 06, 2014). Click on http://www.investor-edge.com/FreeReports to read our free earnings insight on Yum! Brands. During Q3 FY14, Yum! Brands Inc.'s total revenues declined 3% Y-o-Y, while the company's net income and diluted EPS surged 166% and 171%, respectively, from Q3 FY13. Our free coverage report can be accessed at:

http://www.investor-edge.com/register

Earnings Overview  

Yum! Brands Inc.'s total revenue during Q3 FY14 stood at $3.35 billion compared to $3.47 billion in the year ago period. Analysts from Bloomberg were expecting the company to report revenue of $3.37 billion during the reported quarter. Yum! Brands Inc.'s revenue from KFC division increased 10% Y-o-Y to $771 million and for Taco Bell division the company's revenue grew 1% Y-o-Y to $443 million, while revenues from Pizza Hut division stood flat at $264 million. Further, Yum! Brands Inc.'s revenue from China division fell by 10% Y-o-Y to $1,840 million, whereas revenue from India division grew 20% Y-o-Y to $36 million. The free research on YUM can be downloaded as in PDF format at:

http://www.Investor-Edge.com/YUMFreeReport

During Q3 FY14, Yum! Brands Inc.'s operating profit from KFC and Taco Bell divisions increased 16% and 14%, respectively, on Y-o-Y basis. However, operating profits from China and Pizza Hut divisions declined 38% (prior to foreign currency translation) and 2%, respectively, Y-o-Y. During the reported quarter, the company's worldwide effective tax rate decreased to 22.4% from 33.1% in the prior year, which benefitted EPS by 14 percentage points. Yum! Brands Inc.'s Q3 FY14 net income broadened to $404 million or $0.89 per diluted share, from $152 million or $0.33 per diluted share in the preceding year quarter. Yum! Brands Inc.'s reported quarter's net income outperformed Bloomberg analysts' forecasts of $363.71 million, or $0.81 per diluted share. Further, excluding special items, the company's Q3 FY14 EPS grew 3% to $0.87 from $0.85 in the previous year.

David C. Novak, Chairman and CEO of Yum! Brands, stated that he is confident in the company's ability to deliver strong, sustainable growth in the years ahead despite the recent supplier incident in China, which has significantly impacted sales in the region, leading the company to reduce its full-year EPS outlook. The Company reported that its supplier OSI was investigated by Shanghai FDA for improper food handling practices by OSI's division Shanghai Husi, following which the Company terminated its relationship with OSI globally.

The company's CEO stated that China sales are on the path to recovery and the company expects to develop at least 700 new restaurants in China this year, which will ultimately deliver high returns as it further capitalizes on the world's fastest growing consuming class. Mr. Novak added that outside of China, Yum! Brands expect continued solid sales and profit growth at its KFC division, led by strong international performance and improving U.S. results. The company is extremely pleased with restaurant margins of nearly 21% at Taco Bell in the quarter and the overall results of the breakfast offering, which has given a new growth platform to build upon in the years to come. The company is making progress with its U.S. turnaround for Pizza Hut and has major actions in place to drive same-store sales growth balance of year and beyond. Sign up and read the free analyst's notes on YUM at:

http://www.Investor-Edge.com/YUM-10102014

Mr. Novak mentioned that Yum! Brands' business model is compelling and the company firmly believes that it is building momentum behind major initiatives around the world that will drive strong sales and profit growth in 2015. The company is focused on the three keys to driving shareholder value: new-unit development, same-store sales growth and generating high returns on invested capital.

Based on the assumption that China same-store sales continue to improve, but are negative for Q4 FY14, excluding special items, the company now expects FY14 EPS growth between 6% and 10% Y-o-Y.

Stock Performance 

A day after the earnings release, on October 08, 2014, shares in Yum! Brands Inc. gained 1.45%, ending the session at $70.74. However, on the last close, Thursday, October 09, 2014, the stock finished at $69.00, which was 2.46% below its previous day's closing price. A total of 3.91 million shares were traded, which was slightly above its three months average volume of 3.69 million shares. Over the previous three trading sessions and over the last one month, the company's shares have fallen by 3.33% and 4.26%, respectively. Moreover, the stock has lost 8.74% from the beginning of 2014. Shares in Yum! Brands Inc. are trading below their 50-day and 200-day moving averages of $71.64 and $74.76, respectively. Further, the stock traded at a PE ratio of 20.08 and has a Relative Strength Index (RSI) of 42.11. Visit Investor-Edge and access the latest research on YUM at:

http://www.Investor-Edge.com/YUMEarningsCoverage

Sneak Peek to Corporate Insider Trading  

In the last one month, Yum! Brands Inc. has reported three insider transactions on a single day. On October 09, 2014, Jonathan Blum, SVP, Chief Public Affairs and Global Nutrition Officer of Yum! Brands Inc., bought 9,500 shares of the company worth $313,310 at a price of $32.98 per share. On the same day, he sold equal number of shares for $667,948 at an average price of $70.31 per share. Complimentary in-depth research on YUM is available at:

http://www.Investor-Edge.com/YUMInsiderTrading

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