LOUISVILLE, KY. — Yum! Brands, Inc. income fell 6% in the second quarter despite an increase in sales. For the quarter ended June 12, the company had income of $286 million, equal to 61c per share on the common stock, which compared with $303 million, or 65c per share, in the same period a year ago. Revenue for the quarter was $2,574,000, up 4% from $2,476,000 during the same quarter of the previous year.

“I’m pleased to report we expect to deliver 12% e.p.s. growth this year, making 2010 the ninth consecutive year we meet or exceed our annual target of at least 10%,” said David C. Novak, chairman and chief executive officer. “We followed up a strong first quarter with second-quarter e.p.s. growth of 17% before special items. This was fueled by profit growth in each of our three divisions, including exceptional growth of 33% in China.

Overall, system sales grew by 4% and worldwide operating profit increased 21%, prior to foreign currency translation benefit and special items. A key driver of our overall growth continues to be new unit development in China and Yum! Restaurants International. We continue to expect to open about 1,400 international units this year and remain the industry’s leading international new unit developer.”

For the six months ended June 12, the company posted income of $527 million, or $1.11 per share, up 1% from $521 million, or $1.11 per share, during the same period of the previous year. Total revenue for the six months was $4,919,000 million, up 5% from $4,693,000 during the same period of the previous year.

“Overall, we are encouraged with our strong performance in a difficult macro-economic environment,” Mr. Novak said. “Longer term, we continue to drive aggressive, international expansion while maintaining our industry-leading return on invested capital as we provide cash to shareholders through dividends and share repurchases.”

The company raised its full-year e.p.s. forecast from $2.39 to $2.43 per share based on first half performance.