US: Dean Foods books slump in Q1 profits

By: just-food.com | 10 May 2010

Net income slumped 43%
Acquisition, restructuring costs weighed on bottom line
Sales up almost 10%

Private-label has hit margins at Dean's fluid-milk business

Dean Foods has posted a 43% fall in first-quarter profits, as costs linked to acquisitions made last year and to restructuring throughout the business hit the US dairy group's bottom line.

The company, which announced a further round of job cuts today (10 May), booked net income of US$43.1m for the three months to 31 March - compared to $76.2m a year earlier.

Operating income fell from $192.8m last year to $119.1m in the first quarter of the current fiscal year.

Adjusted operating costs rose $74m in the quarter due to acquisitions made year, including the purchase of Alpro, and "transformation initiative support" expenses.

Net sales were up almost 10% to $2.97bn thanks to Dean Foods' ability to pass through higher commodity costs and to "solid" growth from the "value-added brands" within its WhiteWave-Alpro division.

Click here for the first-quarter earnings statement from Dean Foods. Check back later for coverage of the company's conference call with analysts.

Sectors: Commodities & ingredients, Dairy, Financials

Companies: Dean Foods