<div id="subtitle">Restaurant operator Yum Brands expected to show higher profit despite lower revenue in 4Q</div><div><p>Restaurant operator Yum Brands Inc., whose fast-growing China operations have produced hefty profits, reports its fiscal fourth-quarter earnings Wednesday after the market closes. The following is a summary of key developments and analyst opinion related to the period.</p><p>OVERVIEW: Louisville-based Yum Brands, which owns the Taco Bell, KFC, Pizza Hut, Long John Silver's and A&W All-American Food fast-food brands, has seen strong sales and aggressive expansion overseas more than offset sluggish U.S. performance recently.</p><p>In December, the company maintained its prediction of 12 percent growth in earnings per share for 2009, excluding special items. Chairman and CEO David Novak said Yum has benefited from lower commodity costs, a lower tax rate and improved productivity.</p><p>The company's operating profit in China has continued to surge. In the U.S., its sales at restaurants open more than a year fell 6 percent in the third quarter, including a 13 percent drop at Pizza Hut. Lower commodity costs and general cost-cutting helped offset the drop, enabling U.S. operating profit to grow in the third quarter.</p><p>Pizza Hut has added pasta and chicken wings to stand out in the highly competitive pizza segment. KFC has tried to build on the considerable attention given its new grilled chicken in the U.S. after a national roll out last spring.</p><p>The company's China and international divisions were on pace, Novak said in the fall, to open more than 1,400 new restaurants in 2009.</p><p>Yum has more than 36,000 restaurants in more than 110 countries and territories.</p><p>BY THE NUMBERS: Analysts polled by Thomson Reuters, on average, expect the company to earn 49 cents per share for the quarter on revenue of $3.33 billion. A year earlier, it earned 43 cents per share on revenue of $3.38 billion.</p><p>For the full year, analysts expect earnings of $2.26 per share on revenue of $10.82 billion compared with actual earnings of $1.96 per share on revenue of $11.28 billion in 2008.</p><p>ANALYST TAKE: Deutsche Bank analyst Jason West told investors in a research note that Yum expects to benefit from "benign food cost inflation." He added that "we can't recall Yum entering a year where all three divisions were posting negative SSS (same-store sales), perhaps making growth more challenging than usual." West said he agreed with Yum's assessment that the company has a long way to go before reaching market saturation in China and its separate international division. "However, that doesn't mean there won't be some bumps in the road along the way," he said.</p><p>WHAT'S AHEAD: Yum Brands will look for continued solid growth in China to offset any continued sluggishness in U.S. sales.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=68263785&bid=informcom" /></div><div id="copyright"><div>

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