"Our international businesses continue to generate strong,consistent growth," CEO David Novak said in releasing the results."Our proven capability of generating global growth with highreturns and substantial free cash flow gives us confidence that weare on track to deliver another year of solid financialperformance."

Two publicized health incidents "had the most significant impacton US performance," Novak acceded, but the firm says it will stillopen more than 1,000 units globally this year and has raised itsearnings per share projection in FY 2007 to 11% ($3.23), up from10%. If achieved, it would mark the sixth straight year the firmhas registered double-digit EPS appreciation. Listed on the NewYork Stock Exchange, Yum shares closed at $66.73 on Wednesday.

Yum's China Division covers the mainland plus KFC Taiwan andThailand. Strong unit expansion of KFC and Pizza Hut in mainlandChina accounted for much of the increase in profitability duringthe first quarter, according to the company. Sales were up 18% to$331 million, and same-store sales in that division rose by 9% forthe quarter.