Hershey revises earnings outlook due to dairy costs
May 10, 2007
by FoodBusinessNews.net Staff
HERSHEY, PA. — As a result of increasing dairy input costs, The Hershey Co. cut its earnings outlook for 2007. Over the long term, net sales growth should remain in the 3% to 4% range and growth in earnings per share from operations should stay in the 9% to 11% range, but the company revised downward the expected 2007 growth in earnings per share from operations to 4% to 6%.
"On April 20, 2007, the United States Department of Agriculture announced significant changes to the prices of dairy products effective immediately," said David J. West, executive vice-president and chief operating officer. "Recognition of the first-half impact of the 2007 revised outlook for dairy costs will have a disproportionate effect in the second quarter, resulting in diluted earnings per share from operations of 34c to 35c."
Mr. West also said year-over-year earnings performance should improve in the second half.