Hershey reports 4.4% increase in Q2 net income

US chocolate manufacturer Hershey has reported that its net income increased about 4.4% to $135.69m for the second quarter ended 1 July 2012, compared to $130m in 2011, due to higher pricing action.

Net sales increased 6.7% to $1.41bn, compared to $1.33bn in 2011.

Hershey president and chief executive officer John P Bilbrey said that despite challenging global macroeconomic conditions, the company was able to deliver profitable and sustainable growth due to the investments made in the business over the last few years.

"Over the remainder of the year we expect SM&A expenses, excluding advertising, to increase at about the same rate as we continue to make planned investments in marketing and go-to-market capabilities in both the US and international markets," Bilbrey added.

The company increased prices by 6.6% during the quarter, which accounted for most of the sales rise, although the volume dipped 1.1%.

Hershey noted that it expects the sales contribution from price increases and volume to be more balanced during the rest of the year.

For the full year 2012, Hershey anticipates adjusted net earnings to increase 12%-14%, up from its previous estimate of 9%-11%, but the projected sales growth is expected to remain the same at 7% to 9%.

In addition, the company expects earnings per share to be in the range of $2.88 to $2.98.

The company forecast its full-year advertising to increase at low-double digits on a percentage basis compared to the prior year, which will support its core brands and new product launches such as Jolly Rancher Crunch ‘N Chew candy, Ice Breakers Duo mints, and Hershey’s Simple Pleasures chocolates.

For the first six months of 2012, consolidated net sales increased 8.8% to $3.14bn, while net income rose 15% to $334m.