US: Hershey FY profits up 18% as sales quicken in Q4

• Adjusted FY net income up 18.2%
• Net sales increased 7%; accelerated growth in Q4

US confectioner Hershey today (2 February) posted an 18% rise in underlying annual profits as the Reese's maker finished 2010 with accelerating sales growth.

The company said its adjusted net income reached US$587.7m in 2010, up 18.2% on 2009. The adjusted figure stripped out the impact of restructuring costs in both years. Adjusted earnings per share-diluted was $2.55, up 17.5% on the year.

Taking into account the restructuring costs, which were linked to Hershey's supply chain revamp, first launched in 2007, and its "Project Next Century" programme started last year, reported net income increased 16.9% to $509.8m.

Fourth-quarter adjusted net income, however, stood at $140.4m, down from $144.4m a year earlier. Adjusted earnings per share-diluted was $0.61, down 3.2%.

Including the restructuring charges, fourth-quarter reported net income increased 6.9% to $135.5m.

Looking at Hershey's top line, its net sales increased 7% to $5.3bn in 2010, with fourth-quarter net sales rising 5.4%. In the third quarter of 2010, net sales rose 4.2%.

"Hershey ended 2010 strongly, with high-quality net sales and earnings growth for the full year, and strong marketplace performance in the fourth quarter," said president and CEO Dave West.

"We are very pleased with our fourth quarter marketplace performance. Our business has responded to the investments we have made, which has enabled us to continue our marketplace momentum. In the quarter, Hershey's net sales increased 5.4%, driven primarily by volume, including continued faster-paced growth in emerging markets."

Turning to 2011, West added: "While we anticipate meaningfully higher input costs in 2011, productivity and cost savings initiatives are in place and we estimate that full-year 2011 adjusted gross margin will be about the same as last year, while we continue to leverage the global go-to-market capabilities we have built over the past few years.

"As a result, we expect full-year 2011 net sales and adjusted earnings per share-diluted growth to be around the top of the company's long-term 3-5% and 6-8% objectives, respectively."

Shares in Hershey were up almost 1% at $47.14 at 08:58 ET today.

Click here for the full statement from Hershey. Click here for futher insight into the manufacturer's results.