Yum says third-quarter profits up 5%

LOUISVILLE— Fast-food company Yum Brands Inc. said Tuesday its third-quarter profit grew by 5 percent as surging sales in its operations in China more than offset a sharp decline in U.S. results.

The parent company of Taco Bell, KFC and Pizza Hut reported worldwide same-store sales growth of 3 percent, marking its 20th straight quarter of global same-store sales growth.

Net income for the three months that ended Sept. 6 rose to $282 million, or 58 cents a share, compared with $270 million, or 50 cents a share, in the year-ago period. Wall Street had forecast earnings of 54 cents a share.

Yum said its earnings benefited from a favorable tax rate and substantial share buybacks.

Quarterly revenues rose 11 percent to $2.8 billion.

Operating profit in Yum's fast-growing Chinese operations rose 19 percent to $161 million.

Louisville-based Yum said it remains on pace to exceed last year's record restaurant development in China and expects to reach 3,000 restaurants in mainland China by the end of the year. Quarterly restaurant margins in the division declined, mainly because of persistently high food cost inflation, primarily for chicken, the company said.

Yum's international division had operating profit of $138 million for the quarter, up 9 percent from a year ago. Operating profit in the United States fell 16 percent to $158 million for the quarter.