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Tickers in this Article: YUM
When Yum Brands (NYSE:YUM) releases its third quarter earnings on Tuesday, October 9, 2012, it is expected to report earnings that are up 16.9% from a year ago. The consensus estimate is 97 cents per share, up from earnings of 83 cents per share a year ago.

Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: Everything Investors Need To Know About Earnings

What to Expect: While down from 98 cents three months ago, the consensus estimate has remained unchanged over the past 30 days. For the fiscal year, analysts are expecting earnings of $3.26 per share.

Yum is expected to report revenue of $3.64 billion for the quarter, beating last year's figure of $3.27 billion by 11.2%. Revenue for the fiscal year is expected to come in at $13.9 billion.

Company Performance: Revenue has grown by double-digit increases in the past four quarters. The average revenue increase has been 13.9%. The fourth quarter of the last fiscal year marked the biggest jump of 15.4%.

YUM's P/E ratio of 20.8 is consistent with the industry average. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios

The stock price has risen from $64.92 on July 6, 2012 to $66.42 over the past quarter. The stock saw one of its worst stretches when its price fell $4.19 per share between August 3, 2012 and September 5, 2012.

The Competition: Yum Brands develops, operates, franchises and licenses a system of restaurants. Analysts are optimistic about Yum, with 14 of 20 assigning it a buy rating. This marks a small improvement, as the number of buy ratings has risen slightly over the past three months.

The company's closest competitor in the restaurants industry is McDonald's (MCD). Analysts are more optimistic about Yum than about McDonald's. Only 14 out of 24 analysts rate the latter a buy.

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