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Yum posts flat earnings after slow U.S. sales

LOUISVILLE Ky. Yum! Brands Inc. reported flat fourth-quarter earnings Monday with still-sluggish U.S. sales suppressing strong international results, especially a KFC-driven 42-percent system sales jump in mainland China and a 17-percent same-store increase there over the prior fourth quarter.

Yum said U.S. Taco Bell sales improved for the last three months of 2007 to a flat year-over-year result after declining for the first nine months of the year. Same-store sales for the blended U.S. system, including KFC and Pizza Hut, rose 1 percent for the quarter, but domestic operating profit fell 1 percent to $196 million as restaurant margins declined 1.4 percent on steep food cost inflation.

Yum posted quarterly net earnings of $231 million, down $1 million from the fourth quarter of 2006, on an 8-percent increase in total revenue to $3.26 billion. Corporate profit was hampered by rising costs, particularly a 12-percent, or $97 million, spike for food and paper at all Yum-owned restaurants and a 16-percent, or $65 million, increase in general and administrative costs.

Full-year net earnings rose 10 percent to $909 million on a 9-percent increase in corporate revenue to $10.4 billion.

Yum, its franchisees and licensees operate more than 35,000 restaurants worldwide.

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