Hershey (NYSE: HSY) had a more than acceptable third quarter in terms of bottom-line growth, but it looks like the market couldn't care less. As I write this, shares of the candy company are trading down 4.4% in the afternoon session, on extremely sweet volume (and by sweet, I mean bad).

On an adjusted basis, Hershey increased per-share profit by 14% to 73 cents. According to Earnings.com, analysts were only expecting 67 cents per share. Hey, what's going on? The Dow and the S&P 500 are in the green, and the NASDAQ is only down slightly. Shouldn't investors be happy with results like these?

The Hershey Company (NYSE: HSY) announced Q2 earnings on Thursday. Shareholders of the confection company should definitely appreciate the growth reported. Net sales increased almost 6%. On an adjusted basis, earnings per share went up a whopping 48% to 43 cents.

According to Earnings.com, analysts were expecting only 35 cents per share. Hershey's management went the extra distance on this one. Not only was the magnitude of the beat impressive, but as Reuters points out, Hershey raised its guidance for the full fiscal year, something that is obviously a positive signal to the marketplace.

Rocky Mountain Chocolate Factory's (NASDAQ: RMCF) first fiscal quarter release had an undeniable theme running throughout. No, it wasn't a happy promo about its delicious confections. Instead, it was the very familiar issue of the recession. I guess the company's premium chocolates aren't wholly economically defensive in nature after all.

According to the results, sales declined by over 5%. Same-store franchised revenues dropped well over 6%. Earnings per diluted share were cut by 25% to 12 cents. Things are rough for Rocky Mountain.

Hershey (NYSE: HSY) did a good job in its first quarter of the year. The big confectioner said it earned $0.38 per share on an adjusted basis. According to this news article, that beat the analysts by three solid pennies.

Not only did the bottom line fare well, but the top line didn't do so badly, either. It increased well over 6%. Okay, that's not a rocketing growth rate, certainly, but all things considered, I think it was a decent performance. Hershey benefited from pricing strategies and the Easter holiday. If you ask me, I think the recent rally in the markets helped to bolster consumer confidence. That may have helped Hershey sell a lot of its candy. Management seemed pretty pleased with volume trends and the response to its marketing initiatives, judging by comments made in the release.

Hershey (NYSE: HSY) reported earnings for the fourth quarter, and investors seemed to think they were rich and delicious. As I was writing this, shares were up 5%. Why were they up so high?

Well, earnings beat estimates. Hershey managed to deliver an adjusted $0.59 per share. Wall Street wanted $0.54, so there you go. Also, that was four pennies better than the previous year's performance. While that was good, it should be noted that Hershey had an overall problematic year, as it saw earnings per share decline a little under 10% to $1.88 per share. Currency changes are hampering sales growth, so Hershey will need to keep marketing activities as strong and efficient as possible. Margins are also being addressed, as management is hunkering down to wring out every conceivable saving in the supply chain.

Poor Rocky Mountain Chocolate Factory (NASDAQ: RMCF). Chocolate is supposed to be sweet, delicious, fun! It's supposed to be a driver of shareholder value. Alas, in the third quarter, chocolate did nothing for shareholders of this company.

So where do I start? Revenues decreased 15%. Comps at franchised locations dipped over 8% (don't you hate it when comps do that?). Net income on a dollar basis dropped 33%. And earnings per share on a diluted basis declined 26% to $0.14. Do you notice a trend here? From the top to the bottom lines, it seems like everything is headed in one depressing direction. Yep, the economy hasn't been kind to the company's gourmet confections. And I don't necessarily see a quick turnaround for Rocky Mountain. Yes, it is still opening stores and is apparently optimistic about the future. Still, I think it's going to be a long journey back to growth. Hey, if Hershey (NYSE: HSY) is having a tough time with its stock price, you can imagine how Rocky Mountain's management is feeling. The earnings release does mention work on a new business model for locations in smaller markets, as well as a focus on return-on-invested-capital in these territories. A laudable goal, certainly, and I like some of the co-branding concepts that were also touched upon. Doesn't necessarily change my bearish thesis, however.

I remember when Rocky Mountain Chocolate Factory (NASDAQ: RMCF) was a cool stock. Unfortunately, that was then and this is now. The economy is horrible, and it's getting worse. Rocky Mountain is not the company with which to ride the storm out.

The third-quarter earnings report, issued on Thursday, showed terrible data. Revenues declined well over 16% to $6.3 million. Earnings per diluted share took a big drop of 30%, coming in at $0.14. And it doesn't stop there. Comps for franchised outlets dipped over 2%. Same-store pounds of products bought by franchisees dropped 10%. Let's face it, people are cutting back on Rocky Mountain's confections. I'm sure they're delicious, but it just doesn't matter. Rocky Mountain is going to continue to struggle as we make our way through this macro mess. Management points out that the stock does pay a dividend of $0.10 per quarter. That gives a yield, as of Thursday's closing price, of just about 6%.

That's not bad, and I suppose if you're a long-term value investor who has extremely solid patience, you might want to take a look at Rocky Mountain's shares. I mean, we all know that equities are pretty irrationally priced these days. But, would I step in and buy the stock as any sort of defensive position for my portfolio? No way. I think it's headed lower. And besides, if I wanted to step in and buy something related to confectionery pleasures, I'd probably consider Hershey (NYSE: HSY) first. Not only am I a big fan of the Reese's peanut butter cup, but I perceive the portfolio controlled by Hershey to be a lot more valuable in these troubled times than Rocky Mountain's line of products. Let's hope all the Halloween trick-or-treaters out there are gearing up to help out the confection industry at the end of this month by demanding a whole lot of treats. Goodness knows, the market has already had its share of tricks this year.

Disclosure: I don't own any company mentioned; positions can change at any time.

While big ticket luxury may be a bit of a stretch for many investors right now, small luxuries are still within reach. Rocky Mountain Chocolate Factory (NASDAQ: RMCF) stands ready to provide sweet relief from bitter financial news. RMCF manufactures an extensive line of premium chocolates, fudge and other confectionary marvels. It also franchises stores to spread temptation far and wide. The company reported 1Q 2009 record sales of $26.6 million, up 2.4%. Net earnings declined by slightly more. The end results is flat diluted EPS of $0.16.

RMCF continues to expand its franchise model. The company opened 8 new franchise locations in 1Q alone, and plans to open a total of 35-40 new franchise locations in FY2009. Franchise, royalty and marketing fees helped counteract the negative effects of sharp cost increases for chocolate and sugar. The company has no current plans to increase franchise fees given the tough times in the retail sector. Nor will the company provide FY2009 guidance, citing macroeconomic uncertainties. The company did declare its 20th straight quarterly dividend of $0.10. The stock trades right around $9, down 50% from its 52-week high of $18.04. RMCF may be a viable stock for bargain investors. No matter the state of the economy, chocolate is NOT a discretionary purchase for some people. Just make certain that due diligence includes extensive sampling of the entire product line. Expand your portfolio and your waistline at the same time.

Hershey (NYSE: HSY) is having growth problems. Not only is it tough just navigating this high-inflationary period, but it's difficult keeping up with the competition. Consumers have a lot of candy choices, and even though Hershey is a big brand name in confections, it thinks it can do better in the marketing department. According to this Wall Street Journal (subscription required) piece, Hershey intends on implementing a 20% increase in spending for promotions.

This double-digit jump in marketing is a smart move, but it won't be easy to digest. With the aforementioned inflationary pressures on the rise, Hershey is going to be sufficiently challenged to push growth while balancing the upward trends in input costs. But is there really a choice here? When you have a super brand like Hershey running into trouble, the thing you need to do is get out there and prop up the inherent equity of the product portfolio.

Yet, there's a bit of a conundrum here, I think. Hershey needs to get people to buy its delicious candies (I'm certainly a fan of the awesome Reese's Peanut Butter Cup). Which demographic loves sweets? Younger kids. They would have represented a great group for growth opportunities, but Hershey has to be careful about marketing too much to this demo since the country has, rightly so, been focusing on healthy alternatives to fatty foods. Even though Hershey has been trying to make some of its portfolio healthier, the flagship brands will always be, one assumes, sugary and full of empty calories. In fact, Hershey is more than aware of this issue, as this corporate link demonstrates.