DALLAS — High raw milk prices coupled with a surplus of organic milk hurt earnings at Dean Foods Co. in the second quarter. Net income in the quarter ended June 30 totaled $28,416,000, equal to 22c per share on the common stock, down 2% from net income of $28,868,000, or 21c per share, during the same quarter of the previous year.
Net sales were $2,843,645,000, up 15% from sales of $2,477,884,000 during the same quarter of the previous year.
"Our results are reflective of the unusually volatile and difficult environment we are operating in this year," said Gregg Engles, chairman and chief executive officer. "Raw milk prices have increased steadily through the first half of the year and have recently hit all-time highs. At the same time, the ramp up of promotional pricing and additional investments behind the Horizon Organic brand during this time of significant raw organic milk oversupply has dampened WhiteWave Foods profit growth."
The Dairy Group segment had an operating income of $165.3 million in the quarter, a 9% decrease compared with an operating income of $181.2 million during the same quarter of the previous year. Net sales in the segment were $2.5 billion, which was up 16% compared with $2.2 billion in net sales during the same quarter of 2006.
The WhiteWave Foods segment posted operating income of $31.7 million during the quarter, an 8% increase compared with $29.3 million during the same quarter of 2006. Sales in the segment were $325.6 million, which was up 8% compared with sales of $301.8 million during the same quarter of 2006.
For the six months ended June 30, net income for the company was $92,236,000, equal to 71c per share, up 13% from $81,660,000, equal to 60c per share, during the same period of the previous year. Net sales were $5,473,394,000, up 10% compared with $4,986,925,000 during the same period of the previous year.