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Hershey Meets Targets

The candy company backs its full-year forecast.
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(HSY) - Get Free Report

posted in-line first-quarter earnings Thursday and reiterated its forecast for the year.

The Pennsylvania-based chocolatier earned $93.5 million, or 40 cents a share, down from $122.5 million, or 60 cents a share, a year earlier, due to hefty restructuring charges.

Excluding the $40.4 million in charges, earnings per share were flat at 51 cents in the quarter. The results matched Thomson Financial's average analyst estimate.

Sales inched up to $1.15 billion from $1.14 billion but were slightly below Wall Street's target of $1.17 billion.

Hershey's results come as the company attempts to overcome disappointing sales and reinvigorate aging brands by introducing new higher-end treats. Earlier this year, the company announced that it was slashing 1,500 jobs and cutting production lines by more than a third.

"We're building momentum behind our new products and continue to benefit from the growth in dark chocolate," said Chairman, President and CEO Richard Lenny. "Seasons and a rebound in Canada provided additional growth during the quarter. However, growth was adversely affected by slower single serve sales. This is being driven in part by marketplace performance that has not yet achieved desired levels."

The company backed its forecast for 2007 sales growth of 3% to 4%, with earnings from operations increasing 7% to 9%.

"New product platforms, including refreshment, premium and dark chocolate are well positioned to make meaningful contributions in 2007," Lenny said.

Shares of Hershey recently were down 59 cents, or 1.1%, to $53.94. The stock has been climbing in the past month amid speculation that the company may merge with candy rival

Cadbury Schweppes