2nd UPDATE: Lindt Upgrades Growth View, Dividend; Earnings Fall

Chocoladefabriken Lindt & Spruengli AG (LISN.EB), the Swiss premium chocolate maker, Tuesday gave an upbeat growth outlook and raised its dividend, sparking a surge in its share price.

Switzerland's largest independent chocolate producer said it expects to post organic growth of 5% to 7% this year, and of 6% to 8% from 2011 onwards, compared with a previous target of 2% to 5%.

Investors liked the news, sending the company's shares higher. At 1310 GMT, they were up CHF920, or 3.6%, at CHF26,580 in a firmer Swiss market.

At the same time as upping its growth targets, Lindt lowered its guidance for earnings before interest and taxes for this year, now aiming at CHF300 million to CHF340 million instead of an original target of CHF360 million. However, the downward revision was widely anticipated because difficult markets and a restructuring--costing some 150 mainly U.S. jobs--depressed profits last year.

Starting 2011, Lindt expects to grow Ebit by an annual 8% to 10%.

The producer of Lindor chocolate balls and the gold foil-wrapped Easter bunny plans to raise its dividend by 11% to CHF400 per registered share and to CHF40 per participation certificate. This is despite a 26% fall in 2009 net profit to 193.1 million Swiss francs ($182.2 million) from CHF261.5 million due to one-off items such as an impairment charge for an Italian warehouse.

Sales of CHF2.52 billion, down 1.9%, were already reported.

Kepler Equities analyst Jon Cox said the company has "come clean" on its profitability for 2010 by taking down its Ebit outlook, and welcomed the upgraded top-line outlook and increased dividend. He reiterated a hold rating and CHF27,000 price target.

Bank Vontobel lifted its rating on Lindt to buy from hold, citing prospects for market share gains and higher profits following the restructuring measures.

The company said it plans to hold selling prices stable "with only minor adjustments."

The U.S., which now generates some 26% of group sales compared with just 2% a few years ago, will remain one of Lindt's main focus countries.

"Today, we're selling around one billion Lindor balls in the U.S., and the potential is still huge," Chief Executive Ernst Tanner said.

He said cocoa prices remain an uncertainty. Recently, prices have stabilized at around GBP2,200 per ton after a massive surge, Tanner said, adding they may fall 10% to 20% once speculative buyers leave the market.

Tanner said the company isn't in talks to grow through takeovers, referring to Lindt's stringent acquisition criteria. He also reaffirmed the company won't put itself up for sale.

Recent consolidation in the sector, including the acquisition by Kraft Foods Inc. (KFT) of Cadbury PLC will lead to a more uniform product offering, said Tanner, and Lindt--now ranked number six in the world by size--is expected to benefit from consumers' appetite for exclusive products.

Company Web site: http://www.lindt.com

-By Martin Gelnar, Dow Jones Newswires; [phone]; [e-mail]