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Yum Brands beats on earnings, raises guidance

Jul 14, 2016, 01:46 IST

A Kentucky Fried Chicken employee welcomes a customer at China's first drive-through restaurant in Beijing September 3, 2002.REUTERS/Wilson Chu

Yum Brands reported second-quarter earnings that topped forecasts, but sales that missed expectations, after the market close on Wednesday.

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The company, which operates fast-food brands including KFC and Taco Bell, reported $0.75 in adjusted earnings per share (EPS), on revenues of $3.01 billion.

It boosted its core operating profit growth guidance to at least 14%.

Analysts had forecast that it earned $0.74 in adjusted earnings per share on revenues of $3.09 billion, according to Bloomberg.

Analysts are again focusing on how the restaurants performed in China, where sales slowed recently. Bloomberg Intelligence analysts noted that the second quarter is usually the toughest of the year in China, because some sales are lost to the first quarter due to the Chinese New Year.

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The company last year announced it was splitting into two public companies. Yum China would become a franchise in mainland China, with exclusive rights to KFC, Pizza Hut and Taco Bell. And, Yum Brands would expand the three franchises around the world.

Yum Brands shares had rallied about 17% this year through the market close on Wednesday.

More to come ...

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