Dean Foods income down 41% in quarter
May 10, 2011
DALLAS — Net income at Dean Foods Inc. fell 41% as decreased volumes in the company’s Fresh Dairy Direct-Morningstar segment weighed on results during the first quarter.
For the quarter ended March 31, the company had income of $25,263,000, equal to 14c per share on the common stock, which compared with income of $43,154,000, or 24c per share, in the same period a year ago. Sales for the quarter were $3,049,854,000, up 3% from $2,961,143,000 during the same quarter of the previous year.
“Overall, the business is off to a stronger start than we had anticipated, and we are somewhat encouraged as we look to the balance of the year,” said Gregg Engles, chairman and chief executive officer. “While we have a long way to go at Fresh Dairy Direct-Morningstar, I am cautiously optimistic that the trajectory of our business is upward and that we are on a path for continued progress as we move through the balance of the year. In our other major segment, WhiteWave-Alpro continued to perform well, with both strong top- and bottom-line growth against a tough overlap and unfavorable holiday calendar.”
During the quarter, operating income for the Fresh Dairy Direct-Morningstar segment was $111 million, down 12% from $127 million during the same quarter of the previous year. Sales in the segment were $2.54 billion, up 2% from $2.49 billion during the same quarter of the previous year.
For the WhiteWave-Alpro segment, operating income was $47.9 million, up 8% from $44.5 million during the same quarter of the previous year. The segment had sales of $507 million, up 7% from $474 million during the same quarter of the previous year.
The company also said it expects its full-year 2011 earnings per share to be between 67c and 75c, up from a previous outlook of 55c to 65c.
“In this environment, we are focused on three fundamental things to improve the business,” Mr. Engles said. “First, we have stepped up our agenda to reduce costs and improve profitability. Second, because input cost volatility is here to stay, we are focused on pricing to offset inflation through efficient pricing mechanisms. We are working hard to maintain, and where necessary, improve our pricing tools. Third, to offset soft volumes at Fresh Dairy Direct-Morningstar, we are pursuing new business.
“Beginning in the second quarter, we should begin to see new business volume mitigate some of the fluid milk volume weakness we’ve experienced recently. I’m encouraged by the progress we’ve made so far this year across these three fronts. We hope to drive improving results though the balance of the year and enter 2012 with renewed momentum.”