Yum! Brands Earnings: Delicious for Investors

S&P 500 (NYSE:SPY) component YUM! Brands, Inc. (NYSE:YUM) reported a higher net income in first quarter, but missed analysts’ estimates. Yum Brands, Inc. develops, operates, franchises and licenses a system of restaurants.

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YUM! Brands Earnings Cheat Sheet for the First Quarter

Results: Net income for YUM! Brands, Inc. rose to $264 million (54 cents/share) vs. $241 million (50 cents/share) a year earlier. An increase of 9.5% from the year earlier quarter.

Revenue: Rose 3.4% to $2.42 billion YoY.

Actual vs. Wall St. Expectations: YUM fell short of the mean analyst estimate of 64 cents/share. Estimates ranged from 61 cents per share to 67 cents per share.

Quoting Management: David C. Novak, Chairman and CEO said, “Our overall performance was dampened by an unexpected 13% decline in U.S. profits. We knew commodity inflation would be a headwind, but did not plan for a significant reversal in sales trends at Taco Bell due to false claims made about our food quality that resulted in negative publicity. Given Taco Bell’s category leadership we remain bullish on its long-term growth strategy.”

Key Stats:

The company has now seen net income fall in each of the last two quarters. In the fourth quarter of the last fiscal year, net income fell 4.2% from the year earlier quarter.

A year-over-year revenue decrease last quarter snaps a streak of two consecutive quarters of revenue increases. Revenue rose 60.5% in the fourth quarter of the last fiscal year and 22% in the third quarter of the last fiscal year.

Competitors to Watch: McDonald’s Corporation (NYSE:MCD), Wendy’s Arby’s Group Inc. (NYSE:WEN), Starbucks Corporation (NASDAQ:SBUX), Sonic Corporation (NASDAQ:SONC), and Jack in the Box Inc. (NASDAQ:JACK).

Today’s Performance: Shares of YUM are trading at $51.55 as of April 20, 2011 at 5:37 PM ET, up 1.3% from the previous closing price of $50.89.

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