Yum Brands, Inc (YUM), the company that owns household fast food chains KFC and Taco Bell, posts disappointing fourth-quarter sales in China, its biggest market for revenues and profit.

Sales in China fell 16 percent, from 15 percent reported in the previous quarter, the biggest decline in 18 months. This, however, surprisingly beat analyst expectations of a 19.4 percent decline, given the company's battle to recover from food safety scandals rocking the company midway through 2014. It even saw its shares climb 2.5 percent or $1.85 to $75.50.

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Yum Brands, a restaurant the company owns by the same name, likewise saw sales drop 14 percent in the third quarter, ending Sept. 6, down from the 15 percent increase it saw in the second quarter.

The scandal involved claims that its former supplier used expired meat.  In China, consumers have encountered other scandals like tainted milk powder and rat meat used in the place as lamb meat, making the people more cautious of establishments with similar related issues.  

In the United States, YUM similarly reports a loss of $86 million for the last quarter of 2014, versus a profit of $321 million in the same period last year. It posted fourth quarter earnings of 61 cents per share (-29.1% YoY), below expectations of a 66 cents per share on $3,97 billion in revenues. Meanwhile, revenue in 2014 slipped to $4 billion from $4.18 billion in 2013.

Greg Creed, YUM's Chief Executive remains positive on YUM's prospects despite the disappointment in 2014 because of the Chinese supplier incident that offset the company's strong first half of the year.  

In a statement he says,  "Our top priority is to recover sales in China and capture the significant profit leverage we have in this business. While the sales recovery in China continues to be slower than expected, we anticipate a strong second half of 2015 as the turnaround gains momentum, led by menu innovation across the year."

Tagsyum, KFC, Taco Bell, Quarter 4