Hershey Earnings: Here’s Why Investors are Buying Shares Now

Hershey Co. (NYSE:HSY) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 1.32%.

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Hershey Co. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 13.54% to $1.09 in the quarter versus EPS of $0.96 in the year-earlier quarter.

Revenue: Rose 5.5% to $1.83 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Hershey Co. reported adjusted EPS income of $1.09 per share. By that measure, the company beat the mean analyst estimate of $1.04. It missed the average revenue estimate of $1.84 billion.

Quoting Management: “Hershey’s first quarter results, driven by solid volume growth across core brands, represent a good start to the year,” said John P. Bilbrey, President and Chief Executive Officer, The Hershey Company. “We maintained our retail momentum in the U.S. and key international markets. Specifically, first quarter U.S. marketplace performance was strong, driven by solid volume and unit trends across most major pack types resulting in market share gains in every channel where we compete. The broader launch of Brookside Foods Ltd. (Brookside) products in the U.S. is off to a good start and we’re excited about the potential of the brand. Despite the Easter season being shorter versus last year, most customers had a higher percentage dollar sell through versus last year with preliminary seasonal market share results in line with expectations. We’re focused on executing against our plans and are confident that in 2013 we’ll continue to drive core brand volume growth in U.S. and international markets.”

Key Stats (on next page)…

Revenue increased 4.36% from $1.75 billion in the previous quarter. EPS increased 47.3% from $0.74 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.72 and has not changed. For the current year, the average estimate has moved up from a profit of $3.59 to a profit of $3.65 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)