US dairy group Dean Foods has posted fourth-quarter net income from continuing operations of US$76.3m, up 9% from $69.8m in the fourth quarter of 2005, boosted by strong growth in both its dairy division and the WhiteWave Foods brand.
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Earnings per diluted share for the fourth quarter rose to $0.56 from $0.48 in the final quarter of 2005. On an adjusted basis, diluted earnings per share were $0.61, up 17% from $0.52 in the fourth quarter of 2005. Adjusted net income for the fourth quarter rose by 12% to $83.9m. Fourth-quarter operating income rose to $172.6m from $158.9m in the last quarter of 2005.
“Our fourth quarter was a fitting finish to a very successful year at Dean,” said CEO and chairman Gregg Engles. “Our Dairy Group grew full-year fluid milk volumes by 2% in 2006 and increased operating income by 6%. WhiteWave Foods continued to drive strong top-line growth behind our key brands and drove operational efficiencies that resulted in 21% operating income growth for the year. We have significant momentum as we enter 2007 and look forward to another successful year.”
Net sales for the fourth quarter fell to $2.59bn from $2.62 in the fourth quarter of 2005, with volume growth in dairy and sales growth at Whitewave offset by lower overall dairy commodity costs which were passed on to consumers.
On a sector-by-sector basis, dairy group net sales for the fourth quarter fell by 1.7% to $2.2bn, primarily due to the pass-through of lower commodity costs. However, there was a 1% improvement in fluid milk volumes in the quarter. Dairy group segment operating income rose by 4.2% for the fourth quarter to $172.1m, driven by the increase in fluid milk volumes, a relatively favourable dairy commodity environment and improved operational efficiencies.
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By GlobalDataNet sales for the quarter at WhiteWave Foods rose by 5% to $350m, with segment operating income increasing by 24.6% to $46.8m, on the back of increased sales volumes and efficiency improvements.
For the full year, group net income from continuing operations rose to $280.3m from $256.7m in 2005. Adjusted net income rose by 5% to $295.7m, while adjusted diluted earnings per share for 2006 were $2.12, an increase of 16% over the $1.83 reported in 2005. Net sales for the year fell by 0.7% to $10.1bn.
Engles said that with solid growth in operating income expected from both business segments in 2007, the company is expecting earnings in 2007 of $2.33 to $2.38 per share, representing growth of 10% to 12% over 2006 adjusted earnings.
