(By Tim) Yum Brands, Inc. (NYSE: YUM), the worldwide operator and franchiser of restaurant chains and franchises including Taco Bell, KFC, Pizza Hut, Long John Silver and A&W will release the company's 2010 first quarter earnings report on April 14 for the quarter that ended in the U.S. on March 20, 2010.
The consensus estimate for the quarter's earnings is 52¢ per share on the average guess of $2.25 billion in revenues. The range of earnings estimates from the 17 analysts following the stock is from 48¢ to 54¢ per share. For the same quarter one year earlier, Yum Brands earned 48¢ on $2.22 billion of revenues.
For the previous four quarters, the actual reported earnings have exceeded the estimates. For the first quarter of 2009, YUM exceeded the average estimate by 20%. The 2nd and 3rd quarters also surpassed the estimate by 16% and 20% respectively. The 2009 4th quarter earnings were only 2¢ or 4% better than what the Wall Street analysts were predicting.
At the end of 2009, Yum Brands issued an outlook for the company's 2010 prospects. The stated earnings per share goal was a 10% increase from the $2.22 per share earned in 2009. The consensus estimate from the analysts for all of 2010 is $2.62 per share, a little stronger than Yum's stated goal. Growth goals are to be achieved by 2% year-over-year gains in same store sales, 10% revenue growth in China and the opening of approximately 1,400 new international restaurants.
For 2009 the company reported operating profit growth of 9% on sales growth of 5% in local currencies, before special items and currency losses pushed revenues to a 4% decline. A 1% profit growth for U.S. restaurants was boosted by a 5% increase in profit for the Yum Restaurants International and China division has a 23% increase in profits. To fuel the international revenue and profit growth the company opened 1,467 new, non-U.S. restaurants during the year including 509 in China. This is similar to the 1,495 new international restaurants opened in 2008.
Earnings per share increased 13% in 2009 due to the lower number of shares outstanding. Yum Brands has reported EPS gains of 10% or better for 8 straight years. The company appears to be struggling to maintain revenues in the very competitive U.S. market but the growth is running on all cylinders in China and the company's other international markets.
Yum Brands has skillfully managed the earnings per share numbers with a combination of international revenue and profit growth along with a 21% reduction is shares outstanding over the last 5 years. The board of directors has authorized up to $300 million is share buy-backs for 2010. This is a company that really seems to avoid any earnings surprises, especially to the downside. It is difficult to imagine any scenario where the 1st quarter of 2010 will be any different.
