Hershey Q3 Profit Tops Expectations

reported stronger-than-expected earnings for the third quarter. The Hershey, Pennsylvania-based company posted quarterly net income of $154.8 million, or $0.70 per share, compared to $223.7 million, or $1.00 per share, in the year-ago quarter. Its adjusted earnings came in at $1.17 per share. Its sales declined to $1.961 billion from $1.962 billion. However, analysts were expecting earnings of $1.13 per share on revenue of $1.98 billion. The average estimate among 17 Estimize users was for earnings of $1.12 per share and revenue of $1.97 billion. Adjusted gross margin narrowed to 46.0 percent in the third quarter, from 43.8 percent in the year-ago quarter. Consolidated adjusted operating profit climbed 9.1 percent to $414.9 million from $380.4 million. "In the third quarter Hershey's efforts were focused on ensuring successful execution of our seasonal plans, which are on track and should result in good Halloween and Holiday seasons," said John P. Bilbrey, Chairman, President and Chief Executive Officer, The Hershey Company. "Net sales increased 2.0% in the third quarter, excluding unfavorable foreign currency translation. We were very pleased with North America gross margin expansion that resulted in solid operating profit growth. U.S. net sales were below expectations due to lower than expected candy, mint and gum (CMG) retail takeaway in the third quarter." Hershey projects full-year adjusted earnings per share to be towards the low end of its earlier issued range of 3 percent to 5 percent. Hershey shares fell 0.67 percent to close at $94.32 yesterday.