Dean Foods third-quarter results 'disappointing'
November 9, 2010
DALLAS — Impacted by difficulties in the Fresh Dairy Direct–Morningstar segment, income for Dean Foods Co. was down 51% during the third quarter.
For the quarter ended Sept. 30, Dean Foods posted income of $24,296,000, equal to 13c per share on the common stock, which compared with income of $49,653,000, or 28c per share, during the same quarter of the previous year. Sales for the quarter were $3,054,130,000, up 11% from $2,762,709,000.
“These results are clearly disappointing for us and reflect continued significant challenges in our largest business, Fresh Dairy Direct-Morningstar,” said Gregg Engles, chairman and chief executive officer. “Despite our poor consolidated performance, WhiteWave-Alpro continued to perform exceptionally well and delivered significant top- and bottom-line growth. However, given the relative size of the business, it was not enough to offset substantially weaker results in our Fresh Diary Direct-Morningstar segment. In addition to ongoing adverse conditions in the conventional milk business, weak consumer spending led to soft volumes in conventional fluid milk and other beverage and cultured products within our Fresh Dairy Direct-Morningstar business. Our results were also impacted by much higher-than-anticipated butterfat costs. In response to a weak trading environment and our on-going poor performance, we continue to take aggressive steps to improve our results including accelerated cost reductions and the recent realignment of our management and organizational structure.”
For the nine months ended Sept. 30, Dean Foods had income of $23,253,000, or 13c per share, down 62% from $61,238,000, or 34c per share, during the same period of the previous year. Sales for the nine months totaled $3,054,130,000, up 11% from $2,762,709,000.
The company expects its fourth-quarter earnings to be between 13c and 18c per share.
“In the near term we expect our Fresh Dairy Direct-Morningstar business to remain challenged as the retail environment continues to be very competitive and volumes across much of the portfolio are soft,” Mr. Engles said. “We believe these pressures will continue in the fourth quarter and at least through the first half of next year.”
The company also announced that Jack Callahan is resigning as executive vice-president and chief financial officer, and Shaun Mara, who has been senior vice-president and chief accounting officer, will assume the role.