Dean Foods has seen its share price jump today (10 November) after the US dairy group beat third-quarter analyst expectations and guided to an improved fourth-quarter performance.
Shares were up 13.59% at 11:00 ET, climbing to US$16.35. The US’s largest milk processor has seen shares fall around 17% over the past 12 months as weak milk prices hit earnings.
While the company booked a net loss for the three months to 30 September, Dean Foods’ performance was not as bad as the market had feared. Dean Foods’ net losses totalled US$15.97m in the period, or $0.03 per share, compared to an income of $415.1m in the prior year period. Consensus analyst forecasts had predicted losses of $0.13 a share.
Operating losses fell to $1m from an operating income of $23m last year. On an adjusted basis the company reported an operating income of $10m.
Dean Foods also beat expectations on its top line. Revenue increased to $2.37bn, up from $2.2bn last year and ahead of consensus of $2.35bn.
“Given the continued challenges facing the dairy industry due to the dairy commodity environment, we are encouraged by the sequential improvement of our operating results which we believe reflects the success of our current business efforts,” CEO Gregg Tanner said. “This year has clearly been the most difficult operating environment we’ve ever experienced as a company. And so, we remain rigorous in our focus on the things that we control: price realisation, cost productivity and volume at margins that deliver an appropriate return.”
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By GlobalDataDean Foods had suspended its full-year earnings outlook in August due to the “unprecedented and volatile” conditions in the dairy market. It said today it now expects fourth quarter earnings of $0.05-0.15 a share.
