S&P cuts Hershey

Standard & Poor's said it lowered its corporate credit rating on Hershey Co. to A from A+ and removed all ratings on the company from CreditWatch, where they were placed on July 19, with negative implications following weak year-to-date performance and another downward revision to Hershey's earnings outlook for 2007.

The outlook is stable.

The agency said that the downgrade reflects weak performance to date in 2007 and its expectations for limited improvement in the second half of the year following lower earnings guidance due to high dairy costs and slower-than-expected improvement in the primary U.S. business.

The agency added that it believes Hershey will be unable to restore cash flow coverage measures to levels more indicative of an A+ rating, adding that the ratings on Hershey reflect its leading market position in the U.S. chocolate and confectionary market and its strong cash-generating ability.

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