Candy maker Hershey extended a string of impressive results, saying Wednesday that its fourth-quarter profit rose nearly 7 percent as holiday shopping in the U.S. was brisk and growth accelerated in emerging markets.
The results met Wall Street's expectations and the company raised its dividend.
Despite volatility in cocoa exports from the Ivory Coast that has sent prices for chocolate's main ingredient soaring, President and CEO David J. West said Hershey has a good handle on costs in 2011. The company expects results to be around the top of its projections of 3 to 5 percent sales growth and 6 to 8 percent profit growth.
The Hershey Co., which makes Reese's, Twizzlers and Hershey's Kisses, reported net income of $135.5 million, or 59 cents per share, for the three months ending Dec. 31. That beat the $126.8 million, or 55 cents per share, it reported in the fourth quarter a year earlier.
Adjusted income was $140.4 million, or 61 cents per share. Hershey, based in Hershey, Pa., said revenue rose 5.4 percent to $1.48 billion. Both earnings and revenue matched expectations of analyst surveyed by FactSet.
Fourth-quarter margins increased with the help of cost-cutting initiatives and solid seasonal sales, and the company made market share gains, West said.
Hershey has seen solid growth since mid-2008, around the time a newly promoted West began reversing advertising cuts by his predecessor and substantially increased ad spending. In 2010, ad spending jumped by 62 percent over 2009, and by 85 percent in the fourth quarter over the same period last year, Hershey said.
West said he expects Hershey to slow the rate of increase in advertising in 2011 to mid-single-digit percentage growth.
The company also raised its quarterly dividend by 2.5 cents to 34.5 cents, payable on March 15, it said Wednesday.
For all of 2010, Hershey reported revenue of $5.67 billion, up 7 percent from 2009. Net income rose 17 percent to $509.8 million, or $2.21 per share, from $436 million, or $1.90 per share.
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