It's time for a full-year report from taco taskmaster, chicken colonel -- nay, pizza patriarch Yum! Brands (NYSE:YUM). Keep your hot sauce handy as we chew through tonight's numbers.

What analysts say:

  • Buy, sell, or waffle? Nineteen Wall Street analysts follow the former PepsiCo (NYSE:PEP) subsidiary. Four of them are buying, two are selling, and 13 are leaving it at "hold." In our Motley Fool CAPS investor community, it's a three-star stock on the back of 282 user ratings. Add your thoughts on the stock today.
  • Revenues. The company says it will raise revenues by 5% to 6% in fiscal 2007, but doesn't give out hints on a quarterly basis. The analyst revenue consensus is $2.9 billion this time, flat from the year-ago period.
  • Earnings. The analysts are looking for earnings near $0.79 per share, up slightly from last year's $0.77. Management guidance spells out 10% earnings growth for the full year.

What management says:
CEO David Novak is looking across the border for future growth opportunities:

"Unlike the U.S., which is extremely penetrated, we have just begun to capture the huge new unit opportunities in our international businesses. Also unlike the U.S., we have very little competition. Yum! Brands has about 12,000 restaurants for over 4 billion people. We think that provides us with major opportunities for expansion of our brand portfolio."

What management does:
Revenue growth is slowing down, and like I said, Wall Street expects sales to hit the brakes again. But Yum! is growing its income anyway, thanks to more efficient operations and expanding margins. And if you look at cash flows instead of accounting earnings (which works in things like inventory changes, while backing out a massive non-cash depreciation charge), you'll see a cash machine hard at work.

Margins

6/2005

9/2005

12/2005

3/2006

6/2006

9/2006

Gross

47.1%

46.9%

47.2%

47.5%

47.7%

48.3%

Operating

12.7%

12.7%

13.2%

13.6%

14.1%

14.4%

Net

8.2%

8.3%

8.2%

8.3%

8.4%

8.7%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
I can't quite reconcile the slowing revenue growth to all those new and exciting international markets. Management says that all of its restaurant concepts are spreading like wildfire across China, but that Pizza Hut sales stateside are disappointing. Still, "We have turned around each of our brands at one point in time," says Mr. Novak. "We will do it again and we will do it with Pizza Hut. All I can say is to trust our track record -- that will happen again."

It will take some time, though. I'm sure Domino's (NYSE:DPZ) and Papa John's (NASDAQ:PZZA) aren't sitting on their hands, either. Tonight, we'll see how the early part of that turnaround is shaping up.

Competitors:

  • Burger King (NYSE:BKC)
  • McDonald's (NYSE:MCD)
  • Wendy's (NYSE:WEN)

Learn more about the fast-food business -- or any business at all -- along with your fellow investors over at Motley Fool CAPS. The more we invest together, the richer we'll be.

Fool contributor Anders Bylund holds no position in any of the companies discussed here, but he sure likes pizza. You can check out Anders' holdings if you like, and Foolish disclosure is always a tasty treat.