Hershey Beats Estimates, Raises Dividend

The Hershey Company (HSY) reported results for the fourth quarter and full year with quarterly earnings of 55 cents per share. Earnings were 9 cents above the Zacks Consensus Estimate and up 52.8% year over year. Profits were primarily driven by price increases and supply chain efficiencies.

Behind the Headline

Net sales for the quarter increased 2.2% year-over-year to $1.4 billion, driven by favorable pricing and improvement in the international business, which includes a 1% favorable impact from foreign currency translation. Furthermore, management stated that core brands such as Hershey's Kisses are responding to the investments in advertising (which was up approximately 50%), in-store programming and merchandising. In the channels measured by syndicated data, U.S. market share during the fourth quarter declined 0.4 points while up 0.1 points for the full year.

During the fourth quarter, Hershey’s completed its Global Supply Chain Transformation initiative. The company recognized total business costs of $629.1 million. Total savings from the program were $160 million. Total ongoing annual savings from the program of approximately $175 million to $185 million are expected to be achieved by the end of fiscal 2010. Management intends to deploy these savings for brand-building purposes.

Gross margin for the quarter expanded 442 basis points (bps) to 40.5% versus 36.1% in the prior-year quarter. The increase was primarily driven by favorable pricing, Global Supply Chain Transformation program savings and productivity gains, which more than offset the impact of higher input costs. The operating margin for the quarter also expanded 395 bps to 15.1% from 11.1% in the comparable prior-year quarter.

The company had cash and cash equivalents of $253 million and a debt-to-capitalization ratio of 66%.

Company Guidance

Based on the results, management provided its outlook for fiscal 2010. During the first half of 2010, the company intends to continue distribution and rollout of its Hershey's Bliss white chocolate and expansion of the Pieces format to include Hershey's Special Dark, Almond Joy and York. Furthermore, management expects to increase advertising by 25% to 30% during the year to support new product launches and core brands -- primarily Hershey's, Reese's, Hershey's Kisses, Bliss, Twizzlers and Kit Kat.

Through increased levels of consumer investment and brand support, Hershey’s intends to deliver improvement in net sales within its long-term range of 3% to 5%. Annual earnings are expected to be in the long-term range of 6% to 8%.

On February 1, 2010, the Board of Directors declared a quarterly dividend of $0.32 on HSY Common Stock, representing an increase of $0.0225 per share. Additionally, the Board also declared a dividend of $0.29 on the Class B Common Stock, an increase of $0.0222 per share. The dividends are payable on March 15, 2010 to shareholders of record as of February 25, 2010.

Navy, Marines to Start Random Alcohol Tests

NORFOLK, Va.—The Navy and Marines said Monday they plan to introduce random breath tests of personnel on duty as part of a broader health-and-safety push, a move officials concede will be a tough sell with weary troops after a decade of war.

The Navy and Marines will introduce random breath tests of personnel on duty as part of a broader health-and-safety push, Nathan Hodge reports on Lunch Break. (Photo: Getty Images)

The U.S. military already randomly tests members of all branches for illegal drug use. But resorting to breath tests—which detect blood alcohol levels from a breath sample—represents a first for military personnel.

Some Navy crew members, for instance, will have to take a breath test when reporting aboard a ship for duty and other sailors will be subjected to random inspections.

Officials described the alcohol-testing program as an "inspection and prevention" tool to identify sailors or Marines who may need counseling or treatment. Service members who test positive for alcohol won't be allowed to go on duty, but won't be penalized with a permanent record of the result. The Army and the Air Force don't have policies on breath tests.

The program is part of a larger series of personnel policies that the Navy and Marine Corps are promoting to discourage substance abuse and promote fitness—and to keep sailors, Marines and their families ready for deployment.

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Members of the armed forces have drinks and cigars at a bar together after returning to Fort Hood, Texas, from Iraq in December.

Among other things, the program will promote safe driving and motorcycle safety. As part of a push to cut down on tobacco use, which contributes to rising military health-care costs, the Navy and Marines will end discounts on cigarettes at base stores. Tobacco use among service members is higher than in the general population.

While the war in Iraq is now over, and combat operations in Afghanistan are set to come to an end, officials say they expect the pace of deployment to remain high, particularly as the Pentagon shifts focus to the Pacific region.

"The new defense strategy will put increased responsibilities on the Navy and Marine Corps in the years to come," Navy Secretary Ray Mabus said in an "all hands" meeting aboard the amphibious ship USS Bataan. "You, sailors and Marines, are the department's most essential asset, and it is the duty of this department's leadership to do all we can to provide every individual sailor and every individual Marine with the resources to maintain that resiliency."

Mr. Mabus acknowledged that the alcohol program was likely to be controversial. "We're not telling you not to drink, if you're old enough. We are telling you that it's important to keep legal, responsible use of alcohol from turning into a problem."

Military officials also have expressed concern about the psychological toll from repeat combat deployments over the past decade. The Army, for instance, introduced new screening and treatment for post-traumatic stress and brain injuries, in response to a suicide rate that began rising in 2005. While Army officials recently said the number of suicides had leveled off, they remained concerned about problems such sexual assault and domestic abuse.

Officials in charge of the services are "very conscious after a decade of combat…[troops] have earned the opportunity to blow off steam in a responsible way," a senior Navy official said. Random testing, the official added, was "not a punitive tool."

The Navy's submarine fleet in the Pacific has already experimented with a pilot breath-test program that began in 2009. Officials say that program led to a 45% decrease in alcohol-related incidents, such as arrests for driving under the influence.

The Marines haven't launched a pilot program but will begin breath testing in April.

Some enlistees expressed concern over the new policy.

Lance Cpl. Nicholas Wiley, a Marine who attended the meeting, said Mr. Mabus's announcement was the first time he had heard of the initiative. But he said it "could go good or bad. It could get good Marines in trouble" for drinking the night before duty.

Veterans catching up on the policy via the Navy's Facebook page had mixed reactions. "So glad to be retired," wrote one.

Write to Nathan Hodge at Nathan.Hodge@wsj.com

(PNX, NHPR, SFUN, DGI) Stocks Report by DrStockPick.com

Phoenix Companies Inc. (NYSE:PNX) reported a net loss of $6.1 million, or $0.05 per share, and operating income of $14.8 million, or $0.13 per share, for the first quarter of 2011. Operating results reflect the impact of the improved equity markets, lower expenses and favorable mortality. The net loss was driven by declines in the value of hedged positions as a result of improved equity and credit markets. These results compare with net income of $13.7 million, or $0.12 per share, and operating income of $9.7 million, or $0.08 per share, in the first quarter of 2010. Excluding a $4.4 million tax benefit, first quarter 2011 core operating income was $10.4 million, or $0.09 per share.

The Phoenix Companies, Inc., through its subsidiaries, provides life insurance and annuity products in the United States. The company�s life insurance products include universal life, variable universal life, and other products.

National Health Partners, Inc. (NHPR)

National Health Partners, Inc. is a national healthcare savings organization that provides discount healthcare membership programs to uninsured and underinsured people through a national healthcare savings network called “CARExpress.” CARExpress is one of the largest networks of hospitals, doctors, dentists, pharmacists and other healthcare providers in the country and is comprised of over 1,000,000 medical professionals that belong to such PPOs as CareMark and Aetna.

The company’s primary target customer group is the 47 million Americans who have no health insurance of any kind. The company’s secondary target customer group includes the millions of Americans who lack complete health insurance coverage. The company is headquartered in Horsham, Pennsylvania.

Health insurance should not cover basic or routine medical services, but instead should cover major illnesses, surgeries, etc. Moreover, the government should require that healthcare providers charge all patients the same fees for out-of-pocket medical procedures (insurance companies and the government should be free to negotiate discounted prices for the services for which they directly pay, but these preferred rates would not apply to the services paid out-of-pocket by their members). This would bring normal, competitive market forces to bear on the provision of routine medical services.

The second major driver of high healthcare costs is low growth in productivity in the healthcare industry. In labor-intensive professional industries such as law, education, and healthcare, the number of customers serviced in a given year, whether they are clients, students, or patients, changes very little over time.

National Health Partners, Inc. recently announced that it has signed a new agreement with a major marketing company that will significantly enhance the growth of its CARExpress membership base.

According to the Company, this deal, in combination with the previous partnership with Xpress Healthcare, will enable the company to build its membership base exponentially, initially generating in excess of an additional 2,000 new members per month. The new campaign is set to launch within the next few weeks and will provide a material positive impact on the company’s 2nd quarter sales.
National Health Partners anticipate that this new marketing agreement will provide a major impact on their overall sales not only for the 2nd quarter, but more importantly for the year. They look forward to building on the profits that they anticipate generating in 2011 that will be driven by substantial growth in sales of their CARExpress health discount programs. The combination of their substantial growth with their low price-to-equity ratio should reflect itself in the price of their stock over the coming months.

For more information about National Health Partners, Inc visit its website www.nationalhealthpartners.com

SouFun Holdings Ltd. (NYSE:SFUN) the leading real estate and home furnishing Internet portal in China, will report its unaudited first quarter 2011 results before the U.S. markets open on Wednesday, May 11, 2011. SouFun’ management team will host a conference call on May 11, 2011 at 8 a.m. U.S. Eastern Time (8 p.m. Beijing/Hong Kong time). A telephone replay of the call will be available after the conclusion of the conference call at 11:00 a.m. U.S. Eastern Time on May 11 through May 17, 2011. A live and archived webcast of the conference call will be available on SouFun’s website at http://ir.soufun.com.

SouFun Holdings Ltd. provides marketing, listing, technology, and information consultancy services to real estate and home furnishing industries in the People�s Republic of China. SouFun Holdings Ltd. is a subsidiary of Telstra International Holdings Limited.

DigitalGlobe, Inc. (NYSE:DGI) reported financial results for the first quarter ended March 31, 2011. First quarter 2011 revenue was $77.1 million, flat compared with the same period last year. Included in first quarter revenue is $6.4 million of amortized revenue related to NextView, the predecessor to the EnhancedView contract with the U.S. Government. Not included in first quarter revenue is $24.8 million of deferrals related to the service level agreement (SLA) portion of EnhancedView. The company reported a first quarter 2011 net loss of $(0.7) million, or $(0.02) per diluted share, compared with net income of $1.5 million, or $0.03 earnings per diluted share, for the same period last year. First quarter 2011 Adjusted EBITDA, a non-GAAP financial measure, was $55.4 million, an increase of 49% compared with first quarter 2010 Adjusted EBITDA of $37.2 million. Adjusted EBITDA includes current-quarter deferrals related to EnhancedView and, for both periods, excludes approximately $6.4 million of amortized revenue related to NextView.

DigitalGlobe, Inc. provides commercial earth imagery products and solutions. The company collects its imagery products and services via its three high-resolution imagery satellites. DigitalGlobe, Inc. is a subsidiary of Morgan Stanley & Co. Incorporated.

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Buenaventura Receives Permission to Initiate Operations at Tantahuatay Project

LIMA, Peru–(CRWENewswire)– Compa��a de Minas Buenaventura S.A.A. (�Buenaventura� or �the Company�) (NYSE:BVN), Peru�s largest publicly-traded precious metals mining company, announced today that Peru�s Energy and Mining Ministry granted the permits necessary to initiate metallurgical operations at Tantahuatay (Compa�ia Minera Coimolache S.A).

The Tantahuatay operation, which is managed by Buenaventura, is owned by three companies: Buenaventura with 40.09%, Southern Copper Corporation (NYSE:SCCO) with 44.24% and ESPRO, a private company, with 15.67%. Expected gold production at this project, which was completed in July, is estimated at approximately 100,000 ounces of gold per year.

Buenaventura�s Chairman & Chief Executive Officer, Mr. Roque Benavides, stated: �Buenaventura is pleased to receive the permission to initiate operations at the Tantahuatay Project. We have worked hard with the local communities and Peruvian authorities to develop an operation that will contribute to the sustainable development of the surrounding communities, while adding growth to Buenaventura�s future gold production.�

Company Description

Compa��a de Minas Buenaventura S.A.A. is Peru�s largest, publicly-traded precious metals company and a major holder of mining rights in Peru. The Company is engaged in the mining, processing, development and exploration of gold and silver and other metals via wholly owned mines as well as through its participation in joint exploration projects.

Buenaventura currently operates several mines in Peru (Orcopampa, La Zanja, Uchucchacua, Antapite, Julcani and Recuperada), has controlling interest in two mining companies (CEDIMIN and El Brocal), as well as a minority interest in several other mining companies in Peru. The Company owns 43.65% in Minera Yanacocha S.R.L. (a partnership with Newmont Mining Corporation), an important precious metal producer, and 19.26% in Sociedad Minera Cerro Verde, an important Peruvian copper producer.

To request a printed version of the Company�s 2010 annual report on Form 20-F, contact the persons indicated above.

Cautionary Statement

This news release contains �forward-looking statements� within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the safe harbor created by such sections. Such forward-looking statements include, without limitation, statements regarding future mining or permitting activities. Where Buenaventura expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include those concerning the Company�s, Yanacocha�s and Cerro Verde�s costs and expenses, results of exploration, the continued improving efficiency of operations, prevailing market prices of gold, silver and other metals mined, the success of joint ventures, estimates of future explorations, development and production, subsidiaries� plans for capital expenditures, estimates of reserves and Peruvian political, economical, legal and social developments. For a more detailed discussion of such risks and other factors, see the company�s 2006 Annual Report on Form 20-F, which is on file with the Securities and Exchange Commission, as well as the company�s other SEC filings. Buenaventura does not undertake any obligation to release publicly revisions to any �forward-looking statement,� to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

Visit our website:
http://www.buenaventura.com

Contact:

Contacts in Lima:
Compa�ia de Minas Buenaventura S.A.A.
Roque Benavides / Carlos Galvez
(511) 419-2538 / 419-2540
Investor Relations:
Daniel Dominguez
(511) 419-2536
ddominguez@buenaventura.com.pe

or

Contacts in New York:
i-advize Corporate Communications, Inc.
Maria Barona / Peter Majeski
212-406-3690
buenaventura@i-advize.com

Source: Compa��a de Minas Buenaventura S.A.A.

THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY!

China Economy: Short-Term Volatility, Long-Term Stability

Volatility continues to be the watchword for stocks trading on the Chinese mainland. Just last Friday, Chinese share prices enjoyed their biggest gain in six weeks on heavy buying volume. By Monday, the trend was in reverse as shares suffered their biggest loss in nine weeks.

With Shanghai markets being predominantly driven by retail investors, fear and greed hold sway. Fear took center stage again over the weekend as domestic and foreign concerns piled on.

Overseas, the biggest buyer of Chinese exports, Europe, looked increasingly weak as new concerns arose about the financial stability of the region. At the same time, a weekend statement by Premier Wen Jiabao created confusion and more uncertainty about the domestic economy. Premier Wen warned that the country faces tough choices in moderating economic growth and Beijing must avoid piling on adjustment policies and risking "negative consequences."

Wen is talking about the difficult balancing act that his government faces in tempering inflation and soaring property prices without squeezing the growth momentum out of the Chinese economy. The Premier’s open warning about “negative consequences” suggests that he is aware that real estate may be in a bubble and excess pressure could cause an implosion with widespread negative consequences. Although Beijing has taken many measures to soak up excess liquidity in the economy, more will inevitably be done but Wen is cautioning his officials against clamping down too hard.

Stock markets took the Premier’s call for regulatory restraint as a warning about the fragility of the economic recovery. Property developers lost heavily in Shanghai trading. North American indexes trading in Chinese ADRs were also volatile, driven partly by Shanghai and partly by the festering European debt problem.

The question for investors is plain enough. Is the Chinese economy weakening or are shares inexpensive in view of long-term economic prospects?

The World Bank has now weighed in with a clear answer. According to a senior World Bank economist, highly effective investment in infrastructure by the Chinese government (as part of its economic stimulus program), plus the ongoing urbanization process in China, will ensure a continuous rapid growth of the Chinese economy over the next 20 years. We can only wish that the World Bank would make the same prediction about the economic recovery of the United States.

The Chinese government apparently learned a valuable lesson during the Southeast Asian financial crisis in 1997-98. Beijing overcame the economic development bottleneck in Asia during the regional currency crisis by stimulating infrastructure investment, just as it is doing now. Justin Yifu Lin, chief economist and senior vice president of the World Bank, said China’s actions in the nineties laid a solid foundation for the development of an export-oriented Chinese economy. Beijing is laying a strong foundation for future growth again amid worldwide weakness, he believes.

Lin spoke at the “China and the Future of the Global Economy” conference at the University of Chicago, saying:

Since the financial crisis in the second half of 2008, the Chinese government implemented a dynamic financial policy and heavily invested in infrastructure. It propelled China's economic growth and contributed to the global economic growth as well.

Lin’s prediction was not entirely positive, although he did endorse Beijing’s ongoing efforts to clamp down on property speculation. In the longer term he worries about the gap between rich and poor and the undercapitalization of small independent Chinese enterprises.

Nevertheless, a 20-year prediction of growth on the mainland from a non-Chinese government authority is a notable indication that Chinese stocks may be undervalued in the short-run, considering the economy’s long-term prospects.

Disclosure: No positions

Is Shuffle Master's Cash Machine Fast Enough?

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Shuffle Master (Nasdaq: SHFL  ) .

Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Shuffle Master for the trailing 12 months is 257.5.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

In this series, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at Shuffle Master, consult the quarterly-period chart below.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

On a 12-month basis, the trend at Shuffle Master looks less than great. At 257.5 days, it is 34.4 days worse than the five-year average of 223.1 days. The biggest contributor to that degradation was DPO, which worsened 14.9 days when compared to the five-year average.

Considering the numbers on a quarterly basis, the CCC trend at Shuffle Master looks good. At 216.6 days, it is 70.6 days better than the average of the past eight quarters. With quarterly CCC doing better than average and the latest 12-month CCC coming in worse, Shuffle Master gets a mixed review in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.

• Add Shuffle Master to My Watchlist.

Unum Group (UNM)

Unum Group, together with its subsidiaries, provides group and individual disability insurance products primarily in the United States and the United Kingdom. It also provides a portfolio of other insurance products, including employer-and employee-paid group benefits, life insurance, long-term care insurance, and related services. Its products include group long-term and short-term disability; group life and accidental death, and dismemberment; individual disability; group long-term care; voluntary benefits; group life; accident, sickness, and disability; and cancer and critical illness insurance products. The company also provides individual life and corporate-owned life insurance, reinsurance pools and management operations, group pension, health insurance, and individual annuities. Unum Group markets its products primarily to employers interested in providing benefits to their employees. The company sells its products through field sales personnel, independent brokers, consultants, and agency sales force. Unum Group was founded in 1848 and is based in Chattanooga, Tennessee.

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