US: Dean Foods losses narrow, issues cautious outlook
US dairy group Dean Foods today (15 February) indicated that it reduced its losses during the fourth quarter of 2011, spurring a jump in the company's share price.
The Alpro and Horizon maker revealed that its net losses totalled US$9.9m, or five cents a share, in the final quarter, compared with a loss of $20.7m, or 11 cents a share, a year earlier. On an adjusted basis, it earned 27 cents a share during the three-month period.
The improved fourth-quarter drove Dean Foods' share price up by 13.29% to $11.88, from an open of $10.87 at 3.56pm (GMT).
Nevertheless, the group's full-year losses remained considerably up on 2010.
Dean Foods booked a consolidated operating loss of $1.8bn for the 12 months to end-December, up from a loss of $400m in the previous year.
However, on an adjusted basis – taking into account factors including a $1.6bn goodwill impairment charge related to Fresh Dairy Direct in the second half of 2011 – losses totalled $464m in 2011, compared to $472m for 2010.
Net sales for 2011 rose to $13.1bn, compared to $12.1bn in 2010, the company revealed.
Commenting on the result, CEO Gregg Engles said that the company is "cautiously optimistic" about the prospects for 2012.
"Our biggest concerns are continued fluid milk category weakness and industry pricing pressures," Engles said.
However, the company added that it expects to see the benefits of its work to improve margins through cost reduction and anticipates raw milk costs to be flat during the coming year.
Click here for the full release from Dean Foods.
US dairy giant Dean Foods has moved to cool concerns about the potential impact a jump in milk prices could have on its profits....
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