Hershey’s Restructuring Squeeze

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By Douglas A. McIntyre Published
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Hershey (HSY-NYSE) has announced a three-year restructuring plan which includes 1,500 job cuts, and it is cutting production lines.  It will outsource some low value-added items and build a production plant in Mexico.

It expects pre-tax charges and non-recurring project implementation costs of $525 to $575 million over the next three years.  $300 million of the charges will be recognized in 2007 and the rest in 2008.  Hershey estimates that its gross margin will improve and should have an annual savings of roughly $170 to $190 million by 2010.

How many candy makers will ask where the water comes from in making the candy?  HSY shares are up 2% at $52.40 on the news.

Jon C. Ogg
February 15, 2007

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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