Yum Brands Third-Quarter Earnings Sneak Peek

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S&P 500 (NYSE:SPY) component Yum Brands (NYSE:YUM) will unveil its latest earnings on Tuesday, October 9, 2012. 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 97 cents per share, a rise of 16.9% 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 98 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 97 cents during the last month. Analysts are projecting profit to rise by 13.2% versus last year to $3.26.

Past Earnings Performance: Last quarter, the company missed estimates by 3 cents, coming in at net income of 67 cents per share versus a mean estimate of profit of 70 cents per share. In the first quarter, the company beat estimates by 3 cents.

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Wall St. Revenue Expectations: Analysts predict a rise of 11.3% in revenue from the year-earlier quarter to $3.64 billion.

Stock Price Performance: Between July 10, 2012 and October 3, 2012, the stock price rose $3.37 (5.3%), from $63.05 to $66.42. The stock price saw one of its best stretches over the last year between September 4, 2012 and September 11, 2012, when shares rose for six straight days, increasing 6.1% (+$3.87) over that span. 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.

A Look Back: In the second quarter, profit rose 4.7% to $331 million (69 cents a share) from $316 million (65 cents a share) the year earlier, but fell short analyst expectations. Revenue rose 12.5% to $3.17 billion from $2.82 billion.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 13.9% over the last four quarters.

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 29.9% in the fourth quarter of the last fiscal year and 73.5% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With 14 analysts rating the stock a buy, none rating it a sell and six rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.96 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations.

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

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