Yum Shares Sink as Preliminary Profit Falls Short

Monday, 07 Jan 2013 06:00 PM

 

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Shares of Yum! Brands Inc., owner of the Taco Bell and KFC fast-food chains, fell in late trading Monday after reporting preliminary profit that trailed analysts’ estimates.

The shares were down 5.6 percent at $64.12 at 6 p.m. in New York. Louisville, Kentucky-based Yum gained 13 percent last year.

Profit excluding some items in 2012 was $3.24 a share, the company said Monday in a filing with the U.S. Securities and Exchange Commission. The average estimate of 25 analysts surveyed by Bloomberg was $3.26. The company plans to report fourth-quarter and full-year 2012 results on Feb. 4.

Same-store sales in China dropped 6 percent in the fourth quarter, compared with a previous estimate for a decline of 4 percent, Yum said in the filing. There was a “significant impact” on KFC sales in China during the last two weeks in December because of “adverse publicity associated with a government review of China poultry supply,” it said.

Yum is undergoing investigations by the Shanghai Food and Drug Administration, which said tests conducted by a third-party agency from 2010 to 2011 found chicken supplied by Liuhe Group Co. had levels of antibiotics that didn’t meet prescribed standards. Yum, which got 44 percent of its revenue from China in 2011, said that it stopped all supplies from Liuhe in August.

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