Yum! Goes Down Easy: Fool by Numbers

On July 11, Yum! Brands (NYSE: YUM) released second-quarter earnings for the period ended June 16.

• Sales grew by 8%, backed by impressive performances from both the international and China divisions.
• Another quarter, and more shares have disappeared. Average diluted shares fell 3%, marking the 12th consecutive quarter of share buybacks.
• Buoyed by the strong growth coming from the China division, the company has raised its full-year EPS to $1.63, indicating a growth forecast of 12%.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q2 2007	Q2 2006	Change
Sales	$2,367.0	$2,182.0	8.5%
Net Profit	$214.0	$192.0	11.5%
EPS	$0.39	$0.34	14.7%
Diluted Shares	547.0	563.0	(2.8%)

Get back to basics with the income statement.

Margin Checkup

	Q2 2007	Q2 2006	Change*
Gross Margin	25.5%	26.2%	(0.7)
Operating Margin	13.1%	14.1%	(1.0)
Net Margin	9.0%	8.8%	0.2

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q2 2007	Q2 2006	Change
Cash + ST Invest.	$436.0	$267.0	63.3%
Accounts Rec.	$252.0	$223.0	13.0%
Inventory	$98.0	$84.0	16.7%

Liabilities	Q2 2007	Q2 2006	Change
Accounts Payable*	$1,264.0	$1,185.0	6.7%
Long-Term Debt	$2,088.0	$2,027.0	3.0%

*Includes other current liabilities.

The balance sheet reflects the company's health.

Cash Flow Highlights

	YTD 2007	YTD 2006	Change
Cash From Ops.	$593.0	$558.0	6.3%
Capital Expenditures	$217.0	$186.0	16.7%
Free Cash Flow	$376.0	$372.0	1.1%

Free cash flow is a Fool's best friend.

Related Foolishness:

• Yum! Looks Appetizing
• Sweet and Sour at Yum! Brands
• Burger King's Less Subservient Chickens

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. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.