Candy maker The Hershey Company (HSY) on Thursday posted better-than-expected third quarter earnings and raised its quarterly dividend payout by more than 10%.
The Hershey, PA-based company reported third quarter net income of $176.7 million, or 77 cents per share, compared with $196.7 million, or 86 cents per share, in the year-ago period. Excluding one-time items, adjusted profit was 87 cents per share.
Sales rose 7.5% from last year to $1.75 billion.
On average, Wall Street analysts expected a slightly smaller profit of 86 cents per share, on matching revenue of $1.75 billion.
Looking ahead, Hershey raised its full-year earnings forecast. The company now expects adjusted earnings growth for 2012 to rise 14% to 15% from last year, up from a prior outlook of 12% to 14%.
In a separate announcement HSY’s board of directors approved a 10.5% raise in its quarterly dividend payout. The new dividend of 42 cents per share (up from 28 cents previously) will be paid on Dec. 14 with an ex-dividend date of Nov. 20. To collect this new dividend, investors must purchase HSY stock prior to Nov. 20 and hold the shares at least until Nov. 20.
Hershey shares were mostly flat in premarket trading Thursday.
The Bottom Line
Shares of Hershey Foods (HSY) will now have a 2.40% dividend yield, based on the higher dividend payout and last night’s closing stock price of $70.12. The stock has technical support in the $66-$68 price area. The stock is trading near the all-time high range of $72-$74 a share.
The Hershey Company (HSY) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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