HERSHEY, Pa. (AP) _ Hershey Foods Corp. announced Monday that net earnings dropped $20 million, or 12 cents a share, in the third quarter compared to the same period last year, primarily because computer troubles slowed the company’s deliveries.
Net income for the quarter ended Oct. 4 was $87.6 million, or 62 cents per share diluted, the company said. The company reported $107.5 million, or 74 cents per share, during the same period last year.
Hershey had said earlier this month that its earnings would be lower than expected because of a backlog of orders. The results released Monday surpassed analysts’ lowered expectations of 60 cents a share, according to First Call/Thomson Financial.
``As anticipated, our third-quarter sales and earnings declined primarily as a result of problems encountered since the July start-up of new business processes in the areas of customer service, warehousing and order fulfillment,″ Kenneth L. Wolfe, Hershey’s chairman and chief executive officer, said in a statement. ``These problems resulted in lost sales and significantly increased freight and warehousing costs.″
The company has not met its goal of returning to normal customer service levels by the end of this month, Wolfe said. The company expects its response times to improve through the end of 1999 and as a new distribution center opens next year, Wolfe said.
Net sales for the period were $1 billion, compared to $1.2 billion during the same period last year, the company said.
For the first nine months, Hershey earned $362.3 million, or $2.55 per share, up from $230.9 million, or $1.59 per share, in the same period of 1998.
Sales came to $2.87 billion, down from $3.2 billion.
Hershey shares rose 50 cents to $50.18 3/4 in trading on the New York Stock Exchange.