NEW YORK – Restaurant operator Yum Brands Inc. (YUM) reported better-than-expected quarterly earnings and boosted its full-year outlook Monday, sending its shares up more than 4 percent in extended trading.
The parent of KFC, Pizza Hut and Taco Bell chains also said it would further reduce its share count with the buyback of an additional $1.25 billion of company stock.
Third-quarter net income at the parent of the KFC and Pizza Hut fast-food chains rose to $270 million, or 50 cents per share, up 17 percent from $230 million, or 42 cents per share, a year ago.
Yum Brands had 2 percent fewer shares outstanding in the quarter as a result of buybacks, it said.
Wall Street analysts, on average, had been expecting a profit of 45 cents a share, according to Reuters Estimates.
Yum said strength in China and other international markets offset softer results in the United States.
Total revenues rose 13 percent to $2.56 billion from $2.28 billion a year earlier.
Sales at stores open at least a year rose 4 percent worldwide, including gains of 11 percent in China, 7 percent in the international division and 1 percent in the United States.
The company said its U.S. business improved from the first half, but added that sales and profit growth "remains below our target level" because of results at Taco Bell. Yum Brands added that it expects better Taco Bell results in the fourth quarter.
Yum Brands said it now expects full-year per-share profit to rise 13 percent rather than the 12 percent it projected in July. The new forecast is $1.65 a share, up from $1.63 a share in July.
Analysts currently expect a profit of $1.64 a share, according to Reuters Estimates.
Shares of Yum rose 4.4 percent to $37.70 in extended trading on Monday, after rising to an all-time high of $36.48 and closing up $1.94 at $36.29 on the New York Stock Exchange.
The stock trades at about 19.8 times analysts' average 2008 earnings estimate, compared with a multiple of about 18 for rival McDonald's Corp. (MCD).