Hershey reports 10% decline in Q3 net income

US chocolate manufacturer Hershey has reported that its net income decreased 10.1% to $176.7m for the third quarter ended 30 September 2012, compared to $196.7m in 2011, due to acquisition and realignment efforts.

The quarter included charges of $68.4m, which were related to the acquisition of Canadian company Brookside Foods as well as the company’s realignment efforts, compared to $21.4m in 2011.

Excluding these charges, adjusted net income was $199.45m, compared to $193.95m in the previous year.

Sales increased 7.5% to $1.75bn, compared to $1.62bn in 2011.

Hershey president and chief executive officer John P Bilbrey said the company reported strong results, despite macroeconomic challenges, and has delivered on its financial commitments.

"Organic volume trends should continue to improve into the fourth quarter and our Halloween and Holiday seasonal businesses are off to a good start," Bilbrey added.

While the company increased the prices of everyday candy varieties by 10% in 2011, it expanded the price increases to seasonal sweets as well in 2012.

For the full year 2012, Hershey anticipates adjusted net earnings to increase 14%-15%, in the range of $3.22 to $3.25 a share, up from the estimate of 12% to 14% it projected in July 2012.

The company is seeking to boost its market share in the US through new product launches and holiday-themed chocolates, and is also planning to increase its sales in international markets such as China and India.

For the first nine months of 2012, the company’s consolidated net sales increased 8.42% to $4.89bn, while net income increased 4.97% to $511m.