Yesterday, confectionary mogul Wrigley (NYSE:WWY) gave investors something they hadn't had to chew on for a long time -- two straight disappointing quarters. While Q3 of 2005 was only slightly disappointing, Q4 results were much worse.

Diluted earnings per share (EPS) for the fourth quarter declined a jaw-dropping 19% to $0.42. No need to keep you mouth agape, however; $0.10 of the drop was due to an expected supply-chain restructuring charge. That still leaves pro forma earnings flat year over year -- not exactly appetizing for a stock with a P/E of 27.6.

Moving up the income statement, gross margins were down 170 basis points to 54.2%, mostly due to the aforementioned restructuring costs. The rest of the difference comes from the lower-margin products acquired from Kraft (NYSE:KFT) last year. Finally, at the top we find a mouthful of sales; the company eclipsed the $4 billion mark for the first time. While overall sales increases were excellent, organic growth was 7% -- the smallest increase since 2000.

The stock does sound pretty uninteresting if we only take a one-quarter perspective. Unwrapping a little more of the story should present a clearer picture.

One factor that must be taken into account: the more than $1 billion in debt Wrigley took on for last year's acquisition. Interest income of $4 million per quarter has totalled nearly $15 million so far, putting a further drag on earnings. The massive amounts of free cash flow produced will most likely allow the company to consistently take big bites out of the debt, even after shelling out big bucks for the yearly dividend. As predicted, the company increased its dividends again, raising the yield to 2%.

Even though there may be a few uncertainties in the acquisition, I'm pretty certain that gum-chewing won't be going the way of the dodo. In fact, the newly acquired brands provide the company an opportunity to be a bit more creative in new product launches. Wrigley has already launched eight new products this year, including three extensions of the new, recently acquired brands. Product extensions have been beneficial for Hershey (NYSE:HSY), another confectionary giant with a diversified product line. More product lines mean more chances to integrate products into newfangled creations to entice consumers. Both of these companies have a lot of products next to cash registers that millions of people pass by every day. That high level of visibility lowers their costs to increase consumer awareness.

While the P/E ratio looks extremely high for a company expected to grow only 11% for the next five years, the stock hasn't been a true bargain for quite a few decades. A P/E in the low 20's was seen only a handful of times over the past decade. Producing market-crushing returns may be unlikely at this point, but I'd rather invest in a handful of companies that have the potential to do so, rather than invest in an index fund. I don't believe Wrigley is quite ready for that designation, but I'll be watching to see how investors react to some problems that will most likely be short-lived.

Other tasty treats from the Fool:

Kraft is a Motley Fool Income Investor recommendation.

Fool contributor John Bluis has no financial interest in any company mentioned in this article. The Fool has a disclosure policy .