Yum Brands Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Yum Brands (NYSE:YUM) will unveil its latest earnings tomorrow, Monday, February 4, 2013. Yum Brands develops, operates, franchises and licenses a system of restaurants.

Yum Brands Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 81 cents per share, a rise of 8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 85 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 83 cents during the last month. For the year, analysts are projecting net income of $3.25 per share, a rise of 12.8% from last year.

Past Earnings Performance: The company topped estimates last quarter after missing forecasts the quarter prior. In the third quarter, it reported profit of 99 cents per share against a mean estimate of net income of 97 cents per share. In the second quarter, it missed forecasts by 3 cents.

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A Look Back: In the third quarter, profit rose 23% to $471 million ($1 a share) from $383 million (80 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 9% to $3.57 billion from $3.27 billion.

Here’s how Yum Brands traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

yum

Stock Price Performance: Between November 29, 2012 and January 29, 2013, the stock price had fallen $10.23 (-13.7%), from $74.47 to $64.24. It saw one of its worst periods between August 21, 2012 and August 28, 2012 when shares fell for six straight days, dropping 2.8% (-$1.82) over that span. The stock price saw one of its best stretches over the last year between December 10, 2012 and December 17, 2012, when shares rose for six straight days, increasing 4.3% (+$2.82) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.01 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 73.5% in the first quarter and 4.7% in the second quarter before increasing again in the third quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 15.4% in the fourth quarter of the last fiscal year, 13.1% in the first quarter and 12.5% in the second quarter before increasing again in the third quarter.

Analyst Ratings: With 14 analysts rating the stock a buy, one rating it a sell and eight rating the stock a hold, there are indications of a bullish stance by analysts.

Wall St. Revenue Expectations: On average, analysts predict $4.11 billion in revenue this quarter, no change from the year-ago quarter. Analysts are forecasting total revenue of $13.59 billion for the year, a rise of 7.6% from last year’s revenue of $12.63 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)