Higher Prices Lifts Hershey 1Q Profit By 20 Pct

Excluding costs to streamline its operations, Hershey says it would have earned $86 million, or 38 cents a share. That beat the consensus estimate of 34 cents per share from analysts who also excluded one-time items.

Hershey says revenue rose 6.5 percent to nearly $1.24 billion from $1.16 billion a year ago. Analysts predicted $1.19 billion in sales.

The company is also spending more on promotions, pensions and commodity costs.

Analysts generally viewed the results positively, but many said Hershey shares are overpriced as it recovers from two years of lackluster sales.

"We see little in the way of potential catalysts for the stock and in particular nothing to justify its premium valuation," said a client note from Stifel, Nicolaus & Co. analysts.

Hershey maintained its expectations that sales will grow 2 percent to 3 percent in 2009 and profits will fall short of its long-term objective of 6 percent to 8 percent annual growth.