Earnings Preview: YUM! Brands

| About: Yum! Brands, (YUM)

YUM! Brands, Inc. (YUM) is scheduled to report its Q2 2012 results on July 19, 2012, before the market opens. The street expects EPS and revenue of $0.70 and $3.12B, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from YUM and the news from its closest competitors.

Yum! Brands, Inc. Revenue and Net Income History

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $0.76 EPS, beating analyst estimates of $0.73.

Yum! Brands, Inc. EPS Historical Results vs Estimates

The consensus EPS estimate is $0.70 based on 21 analysts' estimates, up from $0.66 a year ago. Revenue estimates are $3.12B, up from $2.82B a year ago. The median target price by analysts for the stock is $80.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On April 20, 2012, UBS reiterated Buy rating for the company.
  • On April 16, 2012, Barclays reiterated Equal Weight rating for the company.
  • On March 19, 2012, Oppenheimer initiated Outperform rating for the company.
  • On February 8, 2012, RBC Capital Mkts reiterated Outperform rating for the company.
  • On February 7, 2012, Barclays Capital reiterated Equal Weight rating for the company.
  • On February 1, 2012, UBS reiterated Buy rating for the company.

Latest News

  • On May 1, 2012, Yum! Brands Inc announced the promotion of Rick Carucci,, to President of the Corporation, reporting to Chairman and Chief Executive Officer, David C. Novak.
  • On March 23, 2012, Yum! Brands Inc announced that the Board of Directors have declared a dividend of $0.285 per share of common stock. The quarterly dividend will be distributed May 4, 2012, to shareholders of record at the close of business on April 13, 2012.
  • On February 7, 2012, Yum! Brands Inc announced that, the Company is well-positioned to meet or exceed its annual target of at least 10% earnings per share (EPS) growth in fiscal 2012 and beyond.
  • On February 4, 2012, Attorney Advertising. Keller Rohrback L.L.P. announced that it is investigating possible legal claims against a Taco Bell Chain, operated by YUM! Brands, Inc., related to a 2011 Salmonella Enteritidis outbreak.

Competitors

Domino's Pizza, Inc. (DPZ), McDonald's Corp. (MCD), Panera Bread Co. (PNRA), Tim Hortons Inc. (THI), and The Wendy's Company (WEN) are considered major competitors for Yum! Brands and the table below provides the key metrics for these companies and the industry.

Yum! Brands, Inc. key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies for the last one year period.

YUM ChartClick to enlarge

YUM data by YCharts

Competitors' Latest Development

  • On June 28, 2012, The Wendy's Company announced that it is reaffirming its fiscal 2012 outlook for adjusted EBITDA from continuing operations in a range of $320-$335 million.
  • On May 24, 2012, McDonald's Corp announced that it has declared a quarterly cash dividend of $0.70 per share of common stock, payable on June 15, 2012, to shareholders of record at the close of business on June 4, 2012.
  • On May 8, 2012, The Wendy's Company announced that based on these results, the Company has revised fiscal 2012 outlook for Adjusted EBITDA from continuing operations to a range of $320 million to $335 million.
  • On May 7, 2012, Rompres reported that five new United States companies will be listed on the Alternative Trading System of the Bucharest Stock Exchange International Department, starting on May 10, 2012.
  • On April 26, 2012, Panera Bread Company announced that for the second quarter of 2012, it expects earnings per share target in the range of $1.40-$1.43 and expects comparable store sales to increase in the range of 4.5%-5.5%. For fiscal 2012, it is raising it's earnings per share target from $5.50 to $5.55 per share, up to $5.58 to $5.63 per share and it expects to be at the high end of the Company's previous full year comparable store sales target range of 4.5%-5.5%. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $1.42 for the second quarter of 2012.
  • On April 20, 2012, McDonald's Corporation announced that it is continuing into April 2012 with global comparable sales growth expected to be about 4%.
  • On April 10, 2012, Panera Bread Company announced that its Board of Directors has appointed Thomas Patrick Kelly Interim Chief Financial Officer, effective April 9, 2012.
  • On April 5, 2012, The Wendy's Company announced an agreement with The Wissol Group to develop 25 restaurants in Georgia and the Republic of Azerbaijan over the next 10 years.
  • On March 22, 2012, McDonald's Corporation announced that Vice Chairman and Chief Executive Officer (CEO) Jim Skinner has informed the Board of Directors of his decision to retire after 41 years with the Company, effective June 30, 2012.
  • On March 15, 2012, Panera Bread Company announced that Founder and Executive Chairman, Ron Shaich, and President and Chief Executive Officer , Bill Moreton, will become co-CEOs, effective immediately.
  • On March 1, 2012, The Wendy's Company reaffirmed its outlook for fiscal 2012, including adjusted EBITDA of $335 million to $345 million, which it originally issued at its January 30, 2012, Investor Day. In fiscal 2013 and beyond, the Company is targeting an average annual Adjusted EBITDA growth rate in the high-single-digit to low-double-digit range.
  • On February 13, 2012, The Wendy's Company announced the declaration of its regular quarterly cash dividend of $0.02 per share, payable on March 15, 2012 to stockholders of record as of March 1, 2012.
  • On February 7, 2012, Panera Bread Company announced that it expects diluted earnings per share of $1.33 to $1.35 for the first quarter of 2012 and EPS of $5.50 to $5.55 for fiscal 2012.
  • On January 30, 2012, The Wendy's Company announced that for fiscal 2012, it expects adjusted EBITDA to be in a range of $335 million to $345 million. The outlook reflects continuing operations and excludes items such as relocation costs and other expenses related to the consolidation of the Atlanta restaurant support center with the Dublin, Ohio restaurant support center, which the Company estimates to be approximately $23 million.
  • On January 27, 2012, McDonald's Corporation announced that it has declared a quarterly cash dividend of $0.70 per share of common stock payable on March 15, 2012 to shareholders of record at the close of business on March 1, 2012.
  • On January 24, 2012, McDonald's Corporation announced that it expects comparable sales for January 2012 to be up 5.5% to 6.5%.

Technical Overview


The stock has a market capitalization of $29.08B and is currently trading at $64.17 with a 52 week range of $47.15 - $74.44. The stock's year-to-date performance has been 8.45%. It is currently trading above 200SMA, but below 20and 50SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.