Yum Brands reports weaker-than-expected Q3 profits

Fast food company Yum Brands fell 3% in after-hours trading on Wednesday after posting third-quarter profits below analysts' expectations.

The owner of KFC and Taco Bell blamed turbulence in the Chinese market for the disappointing results.

Its Chinese operations are expected to be spun off before the end of the year however, and its sales within the US market remains strong.

Same-store sales — at locations open for at least one year — fell by 1% in China, missing analysts' expectations of a gain of 4.1%.

Chief executive officer Greg Creed said a backlash on western brands after an international court ruled against China in the South China Sea dispute was a primary cause.

"Anticipated tougher laps in the second half of the third quarter were compounded by an international court ruling on claims regarding the South China Sea, which triggered a series of regional protests and negative sentiment against a few international companies with well-known Western brands," Creed said.

"If not for this event, we believe the China Division would have delivered its fifth consecutive quarter of positive same-store sales growth," he added.