Dean Foods admitted today (10 February) that its fourth-quarter earnings fell short of expectations, plunging 24% on higher commodity costs, softening volumes and increased competition.
The US dairy giant said fourth-quarter profit reached US$50.3m, or $0.27 a share, down from $66.4m, or $0.42 a share, last year earlier.
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Excluding one-off items, such as restructuring costs, earnings fell to $0.31, from $0.46 last year. In November, Dean Foods predicted earnings of $0.36 a share.
Fourth-quarter sales dipped from $3.1bn in 2008 to $3bn in 2009 due to the “pass-through” of lower dairy commodity costs.
“Our fourth-quarter performance was below our expectations. As the year came to a close, several of our businesses fell short of expectations,” Dean Foods chairman and CEO Greg Engles admitted.
Engles said Fresh Dairy Direct was hit by more pronounced and sharply rising commodities, while Morningstar profits were challenged by volume softness, steep commodity inflation and a charge incurred to renegotiate a distributor contract.
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By GlobalDataNevertheless, Dean Foods said that full-year EPS rose 15% to $1.38, compared to $1.20 per diluted share in 2008.
Consolidated operating income totalled $622m, compared to $609 million for 2008, driven by strong annual operating profit growth at Fresh Dairy Direct and WhiteWave-Morningstar.
However, annual net sales at the Alpro owner stood at $11.2bn, compared to $12.5bn in 2008.
For the full earnings release, click here, or check back later for just-food’s post conference call insight.
