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LOUISVILLE — Yum Brands Inc., owner of the Pizza Hut, Taco Bell and KFC fast-food brands, said Wednesday that its fourth-quarter net income rose 27 percent with robust growth overseas and a rebound in the U.S.
The company's operating profit in the U.S., where it has struggled as recession-weary consumers are still eating at home more than they used to, rose 15 percent for the period. The figure fell 2 percent for the third quarter.
The improved U.S. showing comes as Yum works to put its Long John Silver's and A&W restaurant chains up for sale so it can focus on its growing international business.
Yum's overseas expansion is in high gear. It opened 507 new restaurants in China and 884 in other countries outside the U.S. last year. It operates more than 37,000 restaurants around the world.
Louisville-based Yum reported net income of $274 million for the three months that ended Dec. 25, or 56 cents per share. That compares with $216 million, or 45 cents per share, a year earlier.
The company's fourth-quarter revenue was $3.56 billion, up from $3.37 billion.
The results beat analysts' expectations in some respects and fell short in others. They expected Yum to earn 60 cents per share on revenue of $3.51 billion, according to FactSet. Analysts typically exclude one-time items.
Yum shares closed at $47.73, up 31 cents, before the report was released. The stock rose another $1.28, or 2.7 percent, to $49.01 after hours.
For the full year, the company reported net income of nearly $1.16 billion, or $2.38 per share, compared with $1.07 billion, or $2.22 per share, in 2009. Its revenue was $11.34 billion, up from $10.84 billion in 2009.
Analysts were expecting earnings of $2.82 per share on revenue of $11.82 billion for the year, according to FactSet.
Chairman and CEO David C. Novak said 2010 was "perhaps our best year as a public company."
"As we enter 2011, we know that we face commodity inflation and a global economy that is still recovering," he said in a statement. "However, we are fortunate that the sizable unit development we achieved in 2010 provides us with a head start toward achieving our 2011 profit growth."
Yum has built KFC into a leading fast-food brand in China, and the chain's same-store sales in China rose 5 percent for the year, benefiting from initiatives that included breakfast offerings, delivery and 24-hour operations.
"We're well on our way to our China business becoming a $1 billion operating profit division for us in the very near future," Yum spokesman Jonathan Blum said in an interview.
The China division's full-year profit was padded by $16 million from Yum's participation in the World Expo in Shanghai, a one-time benefit.
Across its U.S. operations, fourth-quarter operating profit rose 15 percent. For the full year, operating profit was up 3 percent.
Pizza Hut's sales at U.S. restaurants open at least a year — a key barometer for restaurant performance — rose 10 percent in the quarter. At Taco Bell, the figure rose 4 percent, while it rose 1 percent at KFC. For the full year, U.S. same-store sales rose 8 percent at Pizza Hut and 2 percent at Taco Bell, while it fell 4 percent at KFC.
"We recognize we still have work to do at KFC in the United States," Blum said.
