Shares of Yum jumped 4.7 percent to $69.26 in
Yum forecast earnings per share growth of at least 20 percent for
2014. Many analysts had worried that the recent return of bird flu,
which helped hammer demand for chicken in China last year, would hit
Yum's business hard.
"We're not seeing any impact on national sales from bird flu in
China," Yum spokesman Jonathan Blum told Reuters.
Blum added that Yum is seeing "upward momentum" in its KFC China
business, which was also pummeled by a food safety scare in late
China health authorities in January reported 127
laboratory-confirmed cases of human infection with the H7N9 avian
flu virus from mainland China, according to the World Health
Organization. The Xinhua News agency last week reported that the
bird flu has killed 21 people in China so far this year.
Massive travel during the recent Chinese New Year holiday has fueled
worries that many more people may become ill from the virus, and
that it might mutate to become transmissible from person-to-person.
Shanghai's live poultry markets will be closed from the end of
January through April 30 in an effort to lower the risk of the virus
spreading. Other provinces in China also have temporarily banned
live chicken sales.
The chief executive of Tyson Foods Inc last week said demand for
chicken is down as much as 30 percent in China due to a softening
economy, food safety scares and bird flu, resulting in "substantial
oversupply". He added that concerns about a resurgence of avian flu
could further dent demand.
[to top of second column]
PROFIT BEATS STREET
Yum executives will hold a conference call with analysts on Tuesday
Yum earned $321 million, or 70 cents per share, for the fourth
quarter, compared to $337 million, or 72 cents per share, a year
Excluding items related to its Little Sheep investment, retired debt
and other factors, fourth-quarter earnings were 86 cents per share.
That handily topped analysts' average forecast for a profit of 80
cents per share, according to Thomson Reuters I/B/E/S.
China sales at established restaurants fell 4 percent during the
fourth quarter. That result included an estimated decline of 4
percent at KFC and 5 percent growth at Pizza Hut Casual Dining.
The fast-food operator gets more than half of its overall sales in
China, where most of its more than 6,200 restaurants are KFCs.
(Reporting by Lisa Baertlein in Los
Angeles; editing by Bernard Orr)
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