Shares in Dean Foods slumped today (8 August) as the US dairy company swung to a second-quarter loss and narrowed its full-year earnings guidance.
The company reported a loss of US$56.9m in the six months to the end of June, compared with a profit of $56.2m a year earlier. The figure included a $21.8m loss from discontinued operations. Operating profit fell 38% to $43.6m, while sales remained flat at $2.23bn.
CEO Gregg Tanner said the company expects the third quarter to be “the most challenging” of the year. As a result, the firm narrowed its full-year earnings guidance to 47 cents to 53 cents a share, from a previous estimate of 45 cents to 55 cents a share.
“Overall for the year, we continue to expect to substantially offset the financial impact of the lower volumes through accelerated cost reduction and productivity activities, resulting in a low-single digit increase in operating income from the pro forma 2012 results,” Tanner said.
Dean Foods said it made “solid progress” against its target of $120m in cost savings this year, including the planned closure of up to 12 factories by the middle of 2014.
Shares in Dean Foods had tumbled 8.35% to $10.10 at 12:07 ET.
Click here to view the full earnings release.
