Hershey ( HSY) missed earnings targets for the second straight quarter Wednesday.

The Hershey, Pa., chocolatier made $154 million, or 65 cents a share, for the quarter ended Dec. 31, down from the year-ago $170 million, or 69 cents a share. Sales dropped to $1.34 billion from $1.35 billion a year earlier.

Excluding certain costs, latest-quarter earnings were 67 cents a share. Analysts were looking for a 71-cent profit on sales of $1.37 billion.

"Hershey's results for the fourth quarter were below expectations," said CEO Richard H. Lenny. "Although marketplace trends showed improvement, with retail takeaway up 3%, net sales declined by approximately 1% as growth from new product platforms and seasons didn't offset slower base business shipments. Further, the impact of a product recall in Canada affected sales and profitability.

"Hershey's profitability was also affected by a higher level of obsolescence expense, in addition to the lower sales level and a sales mix profile that was less profitable than expected," he added. "Increased obsolescence expense resulted from slower-than-expected retail performance and the costs associated with scaling back on certain items in the portfolio. We will reverse these trends in 2007 with a growth plan driven by a step-up in core brand investment and support of new product platforms that is clearly focused on improving both sales and profitability."

In October, Hershey missed third-quarter targets. In December, the company reduced full-year guidance.

Hershey said Wednesday it expects earnings to rise 7%-9% from a year ago in 2007 on a 3%-4% sales gain.