Dean Foods’ share price was down 9% today (13 February) after the US dairy giant issued a cautious outlook for the year.
Shares in the group were down to US$16.73 in early morning US trading today, despite the firm booking earnings of $167.5m in the 12 months to the end of December. This compared to a net loss of $1.6m last year.
Dean Foods said it achieved the increase despite a “challenging” rise in costs in the back half of the year.
While management said it expects consolidated operating income to grow in the low- to mid-single digits, it said the fluid milk industry remains competitive. The firm said it recently lost a portion of a major customer’s business, which will begin to be reflected in 2013’s second quarter.
Dean Foods, which has been restructuring its business in recent months, selling its Morningstar business and spinning off its WhiteWave Foods unit, booked an operating profit of $427.8m versus an operating loss of $1.9m last year.
Net sales, however, were down slightly to $11.46bn from $11.64bn last year.
The company said it was pleased with the results and enters 2013 with “considerable momentum across many fronts”.