2/6/2012 5:15 PM ET
(RTTNews) - Restaurant chains operator Yum! Brands Inc. (YUM: News ) said Monday after the markets closed that its fourth quarter profit rose 30% from last year, helped by strong performance of its China division. The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly revenue.
The Louisville, Kentucky-based company reported net income for the fourth quarter of $356 million or $0.75 per share, compared to $274 million or $0.56 per share for the year-ago quarter.
Excluding special items, adjusted earnings for the fourth quarter were $0.75 per share, compared to $0.63 per share in the prior year quarter.
On average, 20 analysts polled by Thomson Reuters expected the company to earn $0.74 per share for the fourth quarter. Analysts estimates typically exclude special items.
The parent of the Taco Bell, Pizza Hut and KFC chains said total revenues for the fourth quarter increased 15% to $4.11 billion from $3.56 billion in the same quarter last year. Eighteen analysts had a consensus revenue estimate of $4.03 billion for the fourth quarter.
For the quarter, company sales rose 16% to $3.57 billion, while franchise and license fees and income grew 13% to $554 million.
The company's U.S. division posted total revenues of $1.78 billion in the fourth quarter, down 4% from $1.22 million in the fourth quarter of last year. U.S. division's same-store sales for the quarter grew 1%, driven by growth of 6% at Pizza Hut and offset by declines of 2% at Taco Bell and 1% at KFC. The division's operating profit rose 10% to $191 million from $173 million a year earlier. The company had expected profit performance in the U.S. to improve by the fourth quarter.
Yum! Brands' company ownership in the U.S. dropped to 13% from 15% last year. The company refranchised 404 restaurants, including 264 KFCs, 74 Taco Bells and 66 Pizza Huts in 2011. Its target for Pizza Hut and KFC is about 5% company ownership. The company also said in December that it plans to reduce company ownership in Taco Bell from 23% to about 16% over the next two years.
During the fourth quarter, Yum! Brands divested its Long John Silver's and A&W All American Restaurants brands to key franchisee leaders.
China division's total revenues surged 39% to $1.88 billion in the fourth quarter from $1.35 million a year earlier, while same-store sales jumped 21% and operating profit rose 21% to $210 million. China Division includes solely the results of the company's operations in mainland China. The company opened 327 new restaurants during the fourth quarter in mainland China, taking the full year total to 656 restaurants.
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