Yum! Brands Outruns Estimates Again

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Yum! Brands (NYS: YUM) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Yum! Brands beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP earnings per share grew significantly.

Gross margins contracted, operating margins contracted, net margins increased.

Revenue details
Yum! Brands reported revenue of $3.27 billion. The 17 analysts polled by S&P Capital IQ expected to see a top line of $3.09 billion. Sales were 15% higher than the prior-year quarter's $2.86 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.83. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.82 per share on the same basis. GAAP EPS of $0.75 for Q3 were 34% higher than the prior-year quarter's $0.56 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 25.0%, 110 basis points worse than the prior-year quarter. Operating margin was 12.9%, 40 basis points worse than the prior-year quarter. Net margin was 8.7%, 100 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $4.03 billion.

Next year's average estimate for revenue is $12.54 billion. The average EPS estimate is $2.86.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 3,020 members out of 3,145 rating the stock outperform, and 125 members rating it underperform. Among 847 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 825 give Yum! Brands a green thumbs-up, and 22 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Yum! Brands is outperform, with an average price target of $62.95.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Yum! Brands. Motley Fool newsletter services have recommended buying shares of Yum! Brands. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

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