Appetizing Results at Yum! Brands: Fool by Numbers

On May 1, after the market close, restaurateur Yum! Brands (NYSE: YUM  ) , owner of the venerable Taco Bell, KFC, and Pizza Hut chains, released first-quarter results for the period ended March 31. Here are the quick and dirty details for the quarter.

• Net sales grew 6.6%, driven mainly by China store unit growth of 19%. Same-store sales in the United States fell 3%, including company-owned and franchised stores.
• Gross margins fell, but strong international growth and fewer shares outstanding benefited the bottom line.
• Management increased guidance for the coming year and now expects 11% earnings growth to $3.23, slightly above its long-term goal of 10% annual earnings improvements.
• Yum! carries an average three-star rating in The Motley Fool's CAPS community. Fast-food restaurant rival McDonald's (NYSE: MCD  ) also has a three-star rating, as does Jack in the Box (NYSE: JBX  ) . Wendy's (NYSE: WEN  ) and Burger King (NYSE: BKC  ) carry unappetizing one-star ratings.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q1 2007	Q1 2006	Change
Sales	$2,160	$2,223	$2,085	6.6%
Net Profit	--	$194	$170	14.1%
EPS	$0.64	$0.70	$0.59	18.6%
Diluted Shares	--	275	286	(3.8%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
	25.60%	26.38%	(0.78)
	14.22%	13.53%	0.69
	8.73%	8.15%	0.58

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$341	$195	74.9%
Accounts Rec.	$278	$258	7.8%
Inventory	$97	$84	15.5%

Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$1,278	$1,208	5.8%
Long-Term Debt	$2,208	$1,710	29.1%

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q1 2007	Q1 2006	Change
Cash From Ops.	$341	$297	14.8%
Capital Expenditures	$81	$64	26.6%
Free Cash Flow	$260	$233	11.6%

Find out why free cash flow is a Fool's best friend.

Related Foolishness:

• Warren Buffett's Priceless Investment Advice
• Yum! Looks Appetizing
• 70 Times Better Than the Next Microsoft

Yum! Brands recently upped its dividend. Are you interested in other companies with growing yields? Check out our Motley Fool Income Investor newsletter service free for 30 days.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.