Update: Yum brands net income up 35 pct in 2Q

Shares of Yum! Brands, Inc (YUM) rose on Tuesday ahead of the company's second quarter earnings report to be released after the market closes.

The Louisville, Ky-based firm had previously predicted that the second quarter would be its toughest of the year.

Shares were up 1.29 percent to $36.13 percent at 3:17p.m. ET on the New York Stock Exchange.

The company, which operates and franchises restaurants KFC, Pizza Hut, Taco Bell and Long John Silver's will hold a conference call about the quarter on Wednesday at 9:15 a.m. ET.

We forecast the second quarter will likely be Yum's most challenging quarter and the low point of our year, CEO David Novak said in a released statement at the time.

Factors the company expected to affect results in the second quarter were a low quarterly tax rate, the negative impact of currency rates of nearly $25 million, an increase in expenses from property sales and terminations of over $10 million, negative impact of international refranchising gain/loss of $5 million versus last year, and expectations of mainland China same-store-sales growth of 14 percent and China Division profit growth of 38 percent.

The company's full year outlook is 2009 EPS of $2.10, or 10 percent growth, excluding special items.