Candy maker Hershey Co. (HSY: Quote) reported Thursday a profit for the second quarter that increased from last year, reflecting revenue growth amid higher pricing and productivity gains. This despite higher input costs.
Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also raised its earnings and revenue growth forecast for the full-year 2012.
"The investments we have made in our business over the last few years have enabled us to deliver predictable, profitable and sustainable growth, despite the challenging global macroeconomic conditions that continue to exist," President and CEO John Bilbrey said in a statement.
The maker of Hershey's Kisses and Reese's peanut butter cups reported net income of $135.69 million or $0.59 per share for the second quarter, higher than $130.02 million or $0.56 per share in the prior-year quarter.
Excluding special items, net income for the quarter grew to $151.49 million or $0.66 per share from $129.29 million or $0.56 per share in the year-ago quarter.
On average, 15 analysts polled by Thomson Reuters expected the company to post earnings of $0.61 per share for the second quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter advanced 6.7 percent to $1.41 billion from $1.33 billion in the same quarter last year, driven by higher pricing, but missed twelve Wall Street analysts' consensus estimate of $1.42 billion by a whisker.
"Net price realization was a 6.6 point benefit, slightly better than we expected, and volume, excluding the Brookside acquisition, was off 1.1 points due to volume elasticity associated with the pricing action taken last year." Bilbrey noted.
The company revealed that gross margin expanded 110 basis points due to net price realization, supply chain efficiencies and productivity gains, despite higher input costs.
Looking ahead to fiscal 2012, the company raised its adjusted earnings guidance to a range of $2.88 to $2.98 per share from the prior forecast in the range of $2.82 to $2.92 per share, and also raised its adjusted earnings per share growth guidance to 12 to 14 percent or $3.17 to $3.23 per share, from the previous estimate of a 10 to 12 percent growth.
The company also reaffirmed its forecast for annual sales growth in the range of 7 to 9 percent, including Brookside acquisition.
Street is currently looking for full-year 2012 earnings of $3.21 per share on annual revenues of $6.58 billion.
"As we enter the third quarter, we are well-positioned to deliver on our financial objectives. We have good visibility into the orders for the upcoming Halloween and Holiday seasons where consumers will see higher price points," Bilbrey added.
HSY closed Wednesday's regular trading session at $70.33, down $0.27 on a volume of 0.77 million shares, lower than the three-month average volume of 1.24 million shares. In the past 52-week period, the stock has been trading in a range of $53.83 to $72.97.
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by RTT Staff Writer
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