("Yum Brands 4Q Net Up 30% On Continued Strength In China," at 4:40 p.m. EST, misstated the year-ago adjusted earnings in the eight paragraph. The correct version follows:)
Yum Brands Inc.'s (YUM) fourth-quarter income rose 30% as the fast-food company's sales in China continued to grow, and U.S. sales improved.
Shares were up 2.5% after hours at $64.75 as earnings and revenue beat estimates. As of Monday's close, the stock was up 17% over the past three months.
For the past few years, the owner of KFC, Pizza Hut and Taco Bell brands has touted its strength in China and focused on growth there. Its casual dining chains are booming in urban areas of China and other emerging markets, making up for Yum's weak U.S. performance. However recent signs of an economic slowdown in China and rising food and labor costs there put Yum at risk of losing its biggest edge.
In November, Yum said it is separating its India business into its own standalone segment, a strong indication of its interest in expansion there, given that the only other international market it breaks out is China.
For the latest quarter, China continued to post double-digit same-store sales growth, up 21%, while operating profit rose 15% prior to currency changes.
U.S. operating earnings, which haven't kept pace with its other markets, were up 10% on 1% higher same-store sales.
But Yum's U.S. business hasn't been its top priority. The company has said that 75% of its profits will come from its international businesses by 2015, and last year it found buyers for Long John Silver's Inc. and A&W Restaurants Inc., shedding two smaller domestic businesses in an effort to focus even more on international growth.
Yum posted a profit of $356 million, or 75 cents a share, up from $274 million, or 56 cents a share, a year earlier. Excluding special items, earnings were 63 cents a year earlier. Revenue grew 15% to $4.11 billion.
Analysts polled by Thomson Reuters expected a profit of 74 cents a share on revenue of $4.03 billion.
Worldwide restaurant margin declined 0.9 percentage points to 16% for the year, and declined 1.1 percentage points to 14% for the quarter.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108; firstname.lastname@example.org;