Yum! Brands, Inc. (NYSE:YUM), which owns KFC, Taco Bell and Pizza Hut, is expected to post a nearly 17 percent profit increase for its fiscal third quarter on stronger international sales, which rose despite weaker Chinese revenue.

The Louisville, Ky., company, which on Tuesday report results for the three months ended Sept. 8, is expected to announce earnings per share of 97 cents, a 16.8 percent increase over the year-earlier quarter, according to an analyst survey by Thomson Reuters. Revenue is expected to climb to $3.63 billion from $3.3 billion.

Yum!, which runs 37,000 restaurants and employs 1.4 million people worldwide, has been aggressive in China, where the company has been getting about half its profits and where it is planning to open 700 outlets in 2012. But a slowdown this year has cut Chinese profits to 37 percent of the company's total.

In the second quarter, YUM! cited rising food costs and high labor costs as reasons for the decline in profits from operations in that country.

Yum! said in its last quarterly report that it expect a rebound in profits from China, where consumers typically prefer KFC to the company’s main competitor, McDonald's Corporation (NYSE:MCD). In addition to aggressive expansion in China, Yum is expected to open 900 more outlets outside if the U.S. and China through its Yum Restaurants International Division, which generates about 65 percent of Yum’s operating profit.

“Although we are concerned about a slowdown in China, we think that country offers long-term growth potential, given its large population and rise of the middle class,” said a note from Standard & Poor’s. “We also believe the company has improved its U.S. operations, with same store sales rising 7 percent in the second quarter of 2012.”

Taco Bell contributed significantly to Yum’s second-quarter performance where it saw a 13-percent increase in U.S. sales, thanks in large part to the popularity and hype behind the Doritos Locos Taco. Taco Bell led the way in generating 26 percent growth in U.S.-based operating profit.

Yum was trading down 1.02 percent to $65.79 on Friday. The stock has gained 11.5 percent so far this year.

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