* Earnings of 74 cents per share miss Wall Street view of 76 cents
* Sees profit up 10-12 percent in 2013 vs. prior forecast of 8-10 percent
* Will boost ad spending by 20 percent
Jan 31 Hershey Co reported fourth-quarter earnings below Wall Street estimates on Thursday but raised its 2013 outlook as it expects to benefit from cost-savings and cheaper commodities.
The maker of Kit Kat, Twizzlers and Reese's Peanut Butter Cups said it expected a profit of $3.56 to $3.63 per share this year before special items, representing growth of 10 percent to 12 percent. It previously forecast growth of 8 percent to 10 percent.
"We were surprised by this move, as Hershey usually is more conservative early in its year, but apparently trends are better than the company expected," said JPMorgan analyst Ken Goldman.
The company cited productivity improvements, cost savings and lower "input costs," which include prices for commodities such as cocoa and dairy products.
With the extra profit, Hershey plans to boost its advertising spending by 20 percent to support the launch of its newly acquired Brookside brand and other products.
In the fourth quarter, Hershey's net income was $149.9 million, or 66 cents per share, up from $142.1 million, or 62 cents per share, a year earlier.
Excluding charges for a cost-savings program, pension expense, and acquisition and integration costs, earnings were 74 cents per share. On that basis, analysts on average were expecting 76 cents per share, according to Thomson Reuters I/B/E/S.
Sales rose nearly 12 percent to $1.75 billion, topping the analysts' average estimate of $1.71 billion. The company cited increased sales of core products, higher prices and currency exchange rates.