Dallas-based dairy group Dean Foods has reported earnings per share from continuing operations for the third quarter of US$0.54, up from $0.40 for the third quarter of last year. The company further stated that on an adjusted basis, diluted earnings per share reached $0.56, representing an increase of 19% from $0.47 in last year’s third quarter.
Consolidated operating income reached $169m, up 22% from the third quarter of 2005, while adjusted third-quarter operating income rose by 12% to $174m. Net income rose from $62m to $74m, while adjusted net income for the third quarter was up 6% at $78m.
Turnover for the quarter was down by 2% at $2.5bn, which the company attributed to the “pass through of lower raw dairy input costs, partially offset by fluid milk volume growth at the Dairy Group and continued sales growth at WhiteWave Foods”.
“I am very pleased with the operating profit and earnings per share growth in the third quarter,” said chairman and chief executive officer Gregg Engles. “Our portfolio of businesses continues to perform well, with especially robust results from the Dairy Group this quarter. WhiteWave Foods posted solid sales growth, while making considerable progress against its supply chain and information technology initiatives. As we look forward to 2007, we are confident that we are well positioned for sustained double-digit EPS growth.”
While Dean’s Dairy Group net sales fell by 3% to $2.2bn, operating income from dairy in the third quarter rose by 10% to $173m.
WhiteWave Foods posted third-quarter net sales of $314m, up 5% increase from last year on the back of strong sales growth in the core branded portfolio, which was partly offset by the SKU reduction activities undertaken late in 2005 and slower growth in non-core products.
For the nine-month period, group net sales from continuing operations decreased slightly to $7.5bn, the company added. Diluted earnings per share from continuing operations for the nine months reached $1.45, against $1.20 for the first nine months of 2005. On an adjusted basis, EPS for the first nine months of 2006 totalled $1.51, compared with $1.32 in the first three quarters of 2005. Adjusted net income for the nine months stood at $212m, up from $205m in the same period of 2005.
Engles was optimistic about the prospects for earnings growth during the rest of the year and 2007. “Looking to the end of this year, we believe we will finish the year with earnings per share growth of 15%-16% and are comfortable with estimates for full year 2006 adjusted earnings per share between $2.10 and $2.12,” he said. “Looking forward to 2007, we expect to enter the new year with considerable momentum and are comfortable with expectations for 11%-13% growth in adjusted earnings per share.”
