Hershey (HSY) - Get Report shares dropped on Thursday after the iconic candy maker reported third-quarter earnings that were short of analysts' estimates.

The Hershey, Pa., company's profit in the quarter rose 23% to $1.54 a share from $1.25 in the year-earlier quarter. Adjusted earnings were $1.61 vs. $1.55. Sales rose 2.6% to $2.13 billion from $2.08 billion.

A survey of analysts by FactSet estimated Hershey's third-quarter earnings at $1.58, or an adjusted $1.60, on $2.12 billion of sales.

For all of 2019, Hershey expects per-share earnings to range $5.54 to $5.66, indicating a range between a 1% decline and a 1% increase from 2018. Full-year adjusted earnings are seen $5.68 to $5.74. That's up 6% to 7% from a year earlier.

Hershey expects the year's sales to increase around 2.5%. It boosted that outlook from its previous guidance of sales up around 2%.

FactSet's survey was looking for profit of $5.74, or an adjusted $5.76, a share on sales of $7.95 billion.

Candy sales and market share are rising in the U.S. and internationally, President and CEO Michele Buck said in a statement. Third-quarter net sales rose 2.7% in North America, helped by price increases. Sales rose 1.8% internationally but pricing fell.

Gross-profit margin widened to 44.2% in the third quarter from 41.5% a year earlier.

Hershey shares at last check were down 1.8% at $147.06. The shares were up 40% in 2019 through Wednesday.

Alexia Howard, analyst at Alliance Bernstein, rates Hershey hold. "[While] Hershey's fundamentals remain better than other meal-based food companies, valuation remains rich at about 25 times next-12-months earnings per share," she wrote in a Thursday note.

She said she was encouraged that Hershey continues to increase spending on advertising, "which is in stark contrast to many other U.S. food players."

And broadly Howard prefers Mondelez (MDLZ) - Get Report , "given that it is trading around 20.7 times forward earnings ... once the value of its coffee joint ventures is factored in."

Christopher Growe at Stifel also has a hold rating on Hershey. The company's earnings and gross margin exceeded his expectations.

And a third hold rating comes from CFRA Research's Arun Sundaram, who suggested "the stock is trading down today due to an unrevised 2019 EPS guidance; the Street was looking for earnings of $5.76 but Hershey kept its range of $5.68-$5.74."

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