US dairy giant Dean Foods saw its share price fall today (12 November) as profits fell and sales remained flat in the third quarter.
Operating profit fell to US$22.7m in the three months to the end of September from $107m in the prior year period, hurt by higher reorganisaton costs.
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Net sales remained flat at $2.2bn. Dean foods said its share of US fluid milk sales volume declined to 34.9% during the third quarter from 36.4% in the second quarter. Industry fluid milk volumes declined around 1.7% year-over-year.
Shares were down 7.15% to $18.29 at 11:42 EST.
Dean Foods did, however, book a jump in net earnings in the third quarter, boosted by a large gain on the disposition of WhiteWave Foods.
In the three month period, profit reached $415.1m, up from $36.4m a year earlier.
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By GlobalDataThe company raised its full-year earnings guidance to 85 cents to 91 cents per share, from its prior view of 47 cents to 53 cents. It expects adjusted EBITDA to be between $391m and $400m.
“Turning to the forward outlook for the fourth quarter, although challenges remain, we still expect to deliver solid full-year results,” said CEO Gregg Tanner. “The dairy commodity environment looks more challenging than previously thought as prices remain stubbornly high despite strong domestic production growth. Industry volumes remain soft. We expect to continue to have temporarily higher costs in the fourth quarter related to the plant closure activities. We expect this to be partially offset by our recent new business wins that will begin to improve our volume performance in the fourth quarter.”
