The Hershey Company Earnings Cheat Sheet: Profit Increases Again

S&P 500 (NYSE:SPY) component The Hershey Company (NYSE:HSY) reported its results for the third quarter. Hershey manufactures chocolate and confectionery products, food and beverage enhancers and gum and mint refreshment products.

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The Hershey Company Earnings Cheat Sheet for the Third Quarter

Results: Net income for The Hershey Company rose to $196.7 million (86 cents per share) vs. $180.2 million (78 cents per share) in the same quarter a year earlier. This marks a rise of 9.2% from the year earlier quarter.

Revenue: Rose 5% to $1.62 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: HSY beat the mean analyst estimate of 84 cents per share. Analysts were expecting revenue of $1.62 billion.

Quoting Management: “Hershey’s third quarter financial and U.S. marketplace results were solid as our core brands continue to perform well in all retail channels,” said John P. Bilbrey, President and Chief Executive Officer.”Results were slightly better than our expectations as both U.S. chocolate and non-chocolate candy categories continue to grow greater than the historical average despite macroeconomic challenges.We continue to leverage our intellectual insights and proprietary tools to drive overall category growth that benefits both Hershey and our retail partners.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose more than twofold and in the first quarter, the figure rose 8.6%.

Gross margin shrank 0.5 percentage point to 41.9%. The contraction appeared to be driven by increased costs, which rose 5.8% from the year earlier quarter while revenue rose 5%.

Revenue has risen the past four quarters. Revenue increased 7.5% to $1.33 billion in the second quarter. The figure rose 11.1% in the first quarter from the year earlier and climbed 5.4% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now topped analyst estimates for the last three quarters. It beat the mark by one cent in the second quarter and by 2 cents in the first quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 71 cents per share, up from 70 cents ninety days ago. The average estimate hasn’t changed from $2.83 per share for the fiscal year.

Competitors to Watch: Kraft Foods Inc. (NYSE:KFT), Snyder S Lance Inc (NASDAQ:LNCE), John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), Tootsie Roll Industries, Inc. (NYSE:TR), Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF), Diamond Foods, Inc. (NASDAQ:DMND), Ralcorp Holdings, Inc. (NYSE:RAH), The Hain Celestial Group, Inc. (NASDAQ:HAIN), General Mills, Inc. (NYSE:GIS), and The J.M. Smucker Company (NYSE:SJM).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)