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Yum Brands (NYSE:YUM), parent company of KFC, Taco Bell, and Pizza Hut, saw shares up 4% in after hours trading after reporting strong third quarter numbers. The company beat analysts' earnings per share estimates and also raised full year targets for earnings.

Here are some of the highlights of the third quarter:

· Operating Profit increased 18% before currency translation, led by China (+22%), Yum Restaurants International (+14%), and United States (+13%)

· Sales increased 6% prior to currency translation, led by China (+22%), Yum Restaurants International (+4%), and United States (+1%)

· Earnings per share of $0.99, excluding special items, +19% from previous year

· Year to date earnings per share of $2.42, increase of 14%

Yum Brands saw strong same store sales across all regions including:

· China: +6%

· International: +2%

· United States: +6%

In the United States, Yum Brands saw increases for all three brands. Taco Bell saw the biggest same store sales growth with 7%. I previously wrote about the new Cantina menu rolling out in stores and other new initiatives like the Doritos Loco taco that were shifting sales higher. Pizza Hut saw a same store sales increase of 6%, while KFC saw a 4% increase. Throughout the United States, Yum Brands is also working on re-franchising many of its units to get down to a new goal of 10% company owned restaurants. The company re-franchised 176 units, mainly made up of KFC (158), during the third quarter. Yum Brands now has 11% company owned stores in the United States.

In the quarter, Yum Brands opened 394 new restaurants. Of the new restaurants, 86% opened in emerging markets, including 192 in China, and 181 in other International regions. In China, the company had 4952 locations open, made up of 4043 KFC, and 738 Pizza Hut, at the end of the third quarter. Yum Restaurants International is made up of 14,200 restaurants. By the end of the fiscal year, Yum Brands will have opened 1750 stores outside the United States in the last twelve months.

Yum Brands has been rewarding shareholders more than usual recently. The company raised its dividend 18% in September to an annual payout of $1.34. The increase marked the eighth straight year of double digit increases for the dividend. Yum Brands also repurchased 6.5 million shares for $414 million during the quarter. This now brings the year to date total of shares repurchased up to 10.8 million at a cumulative price of $702 million.

Yum Brands raised their full year guidance for the fiscal year. The company now sees earnings per share hitting $3.24. If the company can hit this new guided number, it would mark the eleventh straight year of 13% earnings per share growth. The company thinks it can continue to hit double digit growth in fiscal 2013, representing a target of $3.56, at 10% growth. Analysts see the company earning $3.26 per share in fiscal 2012. The following year, analysts see earnings per share of $3.74.

Shares of Yum Brands were up 4% in after hours trading to hit $68.70. Over the last fifty two weeks, the company has seen its shares trade between $50.60 and $74.44. With shares trading with a price to earnings ratio of 20 on a current and forward basis, I would wait to make a purchase. I would like to see shares come down into the mid $60s range. Yum Brands is a great pick going forward to play domestic and international markets.

Source: Yum Brands Shares Look Expensive Despite Third Quarter Beat