Yum! Brands Jumping On Strong Earnings, Outlook

Yum! Brands YUM shares are soaring in after-hours trading after the company reported better than expected earnings, and raised its full year outlook. The company just released second quarter earnings, and said it earned 66 cents per share on $2.82 billion in revenues. Wall Street analysts had been expecting earnings of 61 cents per share on $2.78 billion in revenues. Further breaking down the report, the company said that same-store-sales for the second quarter fell 4%, versus the -1.8% Wall Street had been expecting. On the flip side, Chinese same store sales rose 18%, versus expectations of 10.3%. The company also raised its outlook for 2011 earnings per share by at least 12%. The company bought back $166 million worth of stock at an average price of $52 per share during the quarter, and have purchased $308 million year-to-date. David C. Novak, Chairman and CEO said, “I'm pleased to report we are raising our full year EPS growth forecast to at least 12% based on the continued strength of our international businesses. We delivered EPS growth of 13% in the second quarter as strong performance in China and other emerging markets, combined with the benefit of a lower tax rate, offset a very disappointing quarter in the U.S." Novak went on to say, "Our outstanding international results were offset by a 28% decline in U.S. profits, driven by higher commodity costs and a 4% decline in same-store sales. As previously communicated, we anticipated weak second quarter sales and profits, driven largely by the negative impact of a meritless lawsuit and resulting negative publicity at Taco Bell. We expect to improve on these very disappointing results by the fourth quarter. For the full year, we expect strong performance from both China and YRI as well as the benefit from foreign currency translation to overcome a challenging year in the U.S. We're obviously confident 2011 will be the tenth consecutive year we exceed our annual target of at least 10% EPS growth.” At last check, shares were up $1.09 in after-hours trading to $56.67‎, a gain of nearly 2%.