US dairy group Dean Foods saw its shares curdle in pre-market trading in New York today (8 August) after reporting second-quarter numbers that missed analyst forecasts and issuing a profit warning.
Dean Foods posted higher second-quarter and first-half net sales but the growth it saw on its top line during the quarter was below Wall Street estimates. The company also saw its profits fall over both periods, with its adjusted, second-quarter earnings per share lower than analyst estimates.
CEO Ralph Scozzafava said Dean Foods’ “financial results came in well below our expectations”. He admitted: “We are not satisfied with our performance and are determined to improve our execution.”
Dean Foods now sees its full-year, adjusted earnings per share coming in at US$0.80 to $0.95, compared to a May forecast of between $1.35 and $1.55.
Scozzafava added: “In the second quarter, we faced a challenging and rapidly evolving retail environment. We experienced volume pressure from both a macro and competitive perspective that impacted our total volume performance within the quarter, and we anticipate this will carry forward for the remainder of 2017. We are accelerating and expanding an aggressive set of commercial and cost productivity initiatives to address volume and mix. We expect these actions will better position our company for the future.”
Dean Foods’ second-quarter net income stood at $18m, down from $33m a year earlier. Its operating income reached $45m, versus $73m a year ago. It reported second-quarter adjusted earnings per share were 21 cents, below FactSet’s analysis consensus of 31 cents.
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For the first half of 2017, Dean Foods generated a net income of $8m, against $73m for the opening six months of 2016. On an adjusted basis, stripping out items like asset write-downs and restructuring costs, Dean Foods’ half-year net income was $32m, compared to $76m in the first half of 2016.
First-half operating income was $48m, against $151m a year ago. Adjusted operating income stood at $82m, compared to $153m a year earlier.
Dean Foods’ net sales rose 4.2% to $1.93bn, contributing to a 5.2% increase in first-half net sales to $3.92bn. According to FactSet, analysts had expected second-quarter net sales of $1.94bn.
Shares in Dean Foods had fallen 11.49% in pre-market trading to $13.25 at 08:51 ET today.