Yum! Brands Reports Steep Drop in Q1 Profit, But Stock Jumps

, the operator of quick casual restaurant concepts KFC, Taco Bell and Pizza Hut, reported a steep drop in its fiscal first-quarter earnings results on Tuesday after the closing bell. Nevertheless, the company's earnings easily beat analysts' consensus estimates and the stock had added 6 percent in late trading to $68.00. Sales figures at the company, however, came in well below street estimates which may be a cause for concern going forward. Yum! reported net income of $337 million or $0.72 per share, versus $458 million or $0.96 per share, in last year's corresponding period. On an adjusted basis, net income was $0.70 per share, which came in well ahead of analysts' consensus estimates of $0.58 per share. The decline in profit at the company was largely attributable to falling sales in China after adverse publicity related to problems with Yum!'s poultry supply chain. Sales in the first-quarter fell 8 percent to $2.54 billion from $2.74 billion last year. This missed street consensus revenue expectations of $3.04 billion by a wide margin. Investors appear to be discounting the sales headwinds at Yum! and the disappointment may have been priced into the stock. Heading into Tuesday's report, the shares had lost around 8 percent over the last month. Looking ahead, Yum! reiterated its previous guidance calling for a decline in net earnings in the mid-single-digits on a percentage basis. Wall Street is currently modeling full-year earnings per share of $3.05 for the company.