* Earnings of 74 cents per share miss Wall Street view of 76
* Sees profit up 10-12 percent in 2013 vs. prior forecast of
* 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
"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
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