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Hershey sees 72 percent profit jump, raises projection

By Marc Levy

Associated Press

HARRISBURG, Pa. — Hershey, the nation’s second-largest candymaker, said Thursday that a price increase and a muscular new advertising effort helped its second-quarter profit leap by 72 percent.

The results easily beat Wall Street’s expectations, and prompted The Hershey Co. to raise its sales and earnings expectations for the year.

Second-quarter advertising was up 46 percent, as Hershey has poured money into promotions to pull out of a slump and keep pace with its larger competitor in the candy sector, Mars Inc. Hershey remains No. 1 in the chocolate candy segment.

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"Investments in our core brands and retail selling capabilities have resulted in strong gains in net sales, profit and U.S. market share," Hershey President and Chief Executive David J. West said in a statement.

West said the places where Hershey has focused its promotions, primarily in food and convenience stores, have exceeded his expectations.

The Hershey, Pa.-based maker of Hershey’s Kisses and Reese’s said it earned $71.3 million, or 31 cents a share, in the three months ended July 5, up from $41.5 million in the year ago period.

Excluding charges to streamline its operations, Hershey says it would have earned $98 million, or 43 cents a share. That beat the 35 cents-per-share average estimate of analysts.

Revenue rose almost 6 percent to $1.17 billion.

Hershey began 2009 projecting sales to grow 2 percent to 3 percent and profits to fall short of its long-term objective of 6 percent to 8 percent in annual growth.

With two strong quarters under its belt, Hershey said Thursday that it now expects annual sales to grow 3 percent to 5 percent and profits to rise 6 percent to 8 percent.

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