Shares of

Hershey Foods

(HSY) - Get Report

were climbing after the company said first-quarter profit grew 12%. The company cited an increase in candy-bar prices and cost reductions.

For the quarter ended March 30, the company earned $97.6 million, or 73 cents a share, compared with $87 million, or 63 cents a share, in the year-ago quarter.

"Our performance during the quarter was in line with expectations, despite a challenging retail environment," said Richard H. Lenny, chief executive of the Hershey, Pa.-based company. "Profitability and margins increased through a combination of better sales mix and ongoing productivity gains."

Recently, shares were up 1.7% to $63.95.

Sales were $953.2 million, compared with $988.6 million a year ago. The company said revenue was "essentially flat" because "of the buy-in associated with the price increase announced in December 2002 and continued rationalization of the company's product line."

Looking to 2003 results, Hershey said it expects earnings growth of 9% to 11% and sales growth of 2% to 3%. Analysts expect EPS of $3.50, on average, on sales of $4.22 billion. The company earned $3.17 a share in 2002 on revenue of $4.12 billion.