* First-quarter adj earnings per share $1.09 vs est $1.04
* Revenue up 6 pct at $1.83 bln, vs est $1.84 bln
* Raises FY 2013 adj profit view to $3.61-$3.65
By Maria Ajit Thomas
April 25 Chocolate maker Hershey Co
reported a better-than-expected quarterly profit and boosted its
full-year profit forecast as lower commodity prices and new
products boosted margins.
The maker of Kit Kat, Twizzlers and Reese's Peanut Butter
Cups benefited from lower cocoa prices, which fell to an
11-month low in March.
"We continue to expect overall cost deflation in 2013,"
Chief Financial Officer Humberto Alfonso said on a conference
call with analysts.
UBS Investment Research analyst David Palmer said lower
costs will help fuel reinvestment and provide earnings security.
Hershey posted a 6 percent increase in revenue to $1.83
billion, driven by higher sales in the United States, its
largest market, and the introduction of products from Brookside
Foods Ltd into its line-up.
Brookside Foods, which was acquired in December 2011, makes
chocolate-covered fruit juice pieces in flavors such as
pomegranate and acai.
"It's a high-margin product that seems to have market niche
and doesn't overlap directly with what they have," Janney
Capital Markets analyst Jonathan Feeney told Reuters.
Hershey's gross margin expanded 2.4 percentage points to
46.5 percent in the quarter ended March 31. The candymaker
expects gross margin to rise by 1.9 to 2.1 percentage points for
the full year.
Hershey has also stepped up its advertising spending,
particularly for brands such as Twizzlers, Hershey Drops, Rolo
and Jolly Rancher.
"It's really impressive to see how the company's investments
have paid off in terms of volume and (the results are)
suggestive that these trends can continue," Feeney said.
Hershey, which also makes Ice Breakers gum and mints, said
it now expects full-year profit in a range of $3.61 per share to
$3.65 per share, up from the earlier forecast of $3.56 per share
to $3.63 per share. Analysts estimate $3.64 per share, according
to Thomson Reuters I/B/E/S.
The net income rose to $241.9 million, or $1.06 per share,
from $198.7 million, or 87 cents per share, a year earlier.
On an adjusted basis, Hershey earned $1.09 per share.
Analysts on average were expecting profit of $1.04 per
share, on revenue of $1.84 billion, according to Thomson Reuters
Shares of the Hershey, Pennsylvania-based company were up
slightly at $89.93 in morning trade on the New York Stock