Hershey (NYSE:HSY) revealed a fourth-quarter profit that matched expectations, but the company lifted its earnings growth targets for the fiscal year, citing cost-saving initiatives expected to outpace growing commodity prices.
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The maker of Reese’s peanut butter cups, Twizzlers and Kit Kats earned $142 million, or 62 cents a share, compared with a year-earlier $135 million, or 59 cents. Excluding one-time items, the company earned 70 cents, matching average analyst estimates in a Thomson Reuters poll.
Revenue for the three months ended Dec. 31 was $1.57 billion, up from $1.48 billion a year ago, narrowly beating the Street’s view of $1.56 billion. The company’s candy, mint and gum unit and Hershey marketplace continued to outpace average growth rates of 3% to 4%, respectively.
“Our success is reflected in our solid net sales growth and market share gains, giving us flexibility to make broad-based investments while delivering on our earnings objectives,” Hershey CEO John Bilbrey said in a statement.
In 2012, the company plans to continue implementing expansion plans, with its Asian research and development center set to open in Shanghai in the latter half of the year.
Like other food companies, the company has been squeezed by high commodity costs, and it warned those conditions will likely persist through 2012. However, it touted new cost-saving initiatives it hopes will help boost earnings, and lifted its fiscal earnings guidance.
The candy maker forecasts fiscal earnings in the range of $2.79 to $2.89, including impairment charges, which represents year-over-year growth of 9% to 11%. It had earlier forecast growth of 6% to 8%. Wall Street is looking for a profit of $3.12, including charges.
Sales are expected to grow between 5% and 7%, up from its prior guidance of growth of 3% to 5%. Analysts on average are looking for 2012 sales of $6.36 billion.