Chocolate maker Hershey Co. (HSY) is scheduled to announce fourth-quarter results before the market opens Tuesday. On average, 10 analysts polled by Thomson Reuters expect the company to have earned $0.60 per share for the quarter, with estimates ranging between $0.58 and $0.61 per share. Revenues for the quarter are estimated to be $1.42 billion. Analysts' estimates typically exclude special items.
The Hershey, Pennsylvania-based company, established in 1893, is a household name in the U.S. and has strong presence internationally. Its iconic brands include Hershey's, Reese's, Hershey's Kisses, Twizzlers and Ice Breakers. The company hit the headlines recently when Kraft Foods Inc. (KFT) offered to buy British chocolate giant Cadbury plc (CBY, CBRY.L).
Several reports appeared speculating that Hershey would, singly or in joint effort with Nestle or Italy's Ferrero, make a superior offer for Cadbury. Although Hershey said in last November that it was reviewing its options with regard to Cadbury, the company finally decided not to bid for the Dairy Milk maker after Kraft and Cadbury stitched a friendly $19 billion deal.
In October 2009, the candy maker said gains from pricing would not be as significant in the fourth quarter, as the Holiday season is smaller than Halloween. Hershey added it expects shipments of Valentine's and Easter seasonal product to be lower in the fourth quarter of 2009, compared to 2008. Also, the company decided to increase advertising in the fourth quarter and said it expects full-year 2009 advertising expense to increase about 50% from 2008.
The increase in ad spend is expected to benefit Hershey's ''everyday and seasonal business in the near term and into next year, as well as the December launches of Hershey's Bliss white chocolate and the introduction of Hershey's Special Dark, Almond Joy and York Pieces.''
For the third quarter, Hershey's reported net income increased to $162.02 million or $0.71 per share from $124.54 million or $0.54 per share for the same period in 2008. Excluding charges associated with the Global Supply Chain Transformation program announced in February 2007, adjusted net income for the third quarter of 2009 was $168.51 million or $0.73 per share. Consolidated net sales slipped to $1.484 billion from $1.490 billion for the third quarter of 2008.
In the fourth quarter of fiscal 2008, Hershey's reported net income was $82.16 million or $0.36 per share. Excluding charges associated with the Global Supply Chain Transformation program and impairment related to trademark values, net income from operations was $133.84 million or $0.59 per share. Consolidated net sales for the quarter stood at $1.377 billion.
For full year 2008, Hershey reported net income of $311.40 million or $1.36 per share. Consolidated net sales for the year totaled $5.133 billion.
While announcing the third-quarter results, Hershey said it sees 2009 adjusted earnings of $2.12-$2.14 per share. GAAP earnings are expected to range between $1.80 and $1.88 per share.
For the full-year, analysts expect Hershey to report earnings of $2.14 per share on revenues of $5.31 billion.
The candy maker said in October that it anticipates growth in adjusted earnings per share in 2010 to be within its long-term objective of 6%-8%. With competitors consolidating their businesses, Hershey will have to work much harder to retain its market share. The company is likely to update its 2010 outlook today.
Among peers, world's largest food company Nestle (NSTR.L, NSRGY.PK) is scheduled to report fourth-quarter results on February 19.
HSY closed Monday's regular trade at $36.81, up $0.38 or 1.04%, on 2.24 million shares. For the past year, the stock traded in the range of $30.27-$42.25.
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