HARRISBURG, Pa. (AP) ¿ The Hershey Co., the nation's second-leading candy maker, reports earnings for the third quarter on Thursday morning. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Five strong quarters in a row at Hershey put an end to a two-year slide. The company was closely watched in recent weeks as speculation boiled about a takeover of British chocolate and gum maker Cadbury PLC.

The company said nothing publicly about Cadbury in the third quarter. It has an existing relationship with Cadbury: It is licensed to make and distribute Cadbury products, including York peppermint patties, Cadbury chocolates and Caramello candy bars for the U.S. market.

Some analysts pointed to Cadbury's strong market share in developing countries such as India as a reason why Hershey should be interested in buying some of the company. That presence could dovetail with Hershey's effort to gain a foothold in the world's fastest-growing countries, the analysts said.

Hershey has been cautious about its predictions for 2009, worrying that comparisons to last year will be dicey because it has now lapped a price increase that helped boost its revenue in 2008. However, strong sales in the first two quarters prompted Hershey in July to raise its initial 2009 revenue and profit projections.

Hershey has continued to consolidate this year as part of a strategy to close underperforming plants and concentrate on its most profitable brands.

BY THE NUMBERS: Analysts polled by Thomson Reuters on average expect Hershey to report it earned 67 cents per share in the quarter that ended Oct. 4 on sales of $1.54 billion. In the same period a year earlier, it reported earnings of 64 cents, excluding one-time items, on revenue of $1.49 billion.

ANALYST TAKE: Some analysts see Hershey's higher-than-average price-to-earnings ratio compared to other packaged-food companies as being driven by expectations of a buyout by Cadbury or a larger company, such as Nestle. However, many analysts see that as highly unlikely, given the position of Hershey's majority shareholder, The Hershey Trust Co., against selling its controlling stake.

Sanford C. Bernstein & Co. analyst Alexia Howard of said she sees headwinds for Hershey, including markedly higher promotional prices at Halloween and the winter holidays, which could hurt buying. The discontinuation of Starbucks chocolate and Cacao reserve this month could hurt sales through the third quarter of 2010.

Edward Jones analyst Jack Russo said Hershey has a favorable long-term outlook because it has a portfolio of well-known brands such as Hershey's and Reese's, penetration of faster-growing retail channels and a strong product pipeline that should help it gain market share. In addition, a tough economy is prompting customers to trade down from premium chocolate to Hershey's traditional, more mass-market products, he said.

WHAT'S AHEAD: Hershey is projecting 2009 sales to grow 3 percent to 5 percent and profits to rise above the long-term objective of 6 percent to 8 percent growth.

STOCK PERFORMANCE: Hershey's share price rose in the third quarter, July 6 through Oct. 4, by $3.06, or 8.4 percent, to close at $39.54.
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