DALLAS — Net income at Dean Foods more than doubled in the third quarter ended Sep. 30, climbing to $103,875,000, equal to 70c per share on the common stock, from $40,192,000, or 26c per share, in the same period last year.
"Our businesses performed well despite a very challenging environment which included two hurricanes and rapidly rising fuel and resin costs," said Gregg Engles, chairman and chief executive officer. "Consistent with recent trends, our Dairy Group again posted strong volume increases and our WhiteWave division posted strong growth in both net sales and profitability."
Net income from continuing operations increased 75% to $66,408,000 from $37,826,000 in the same period last year.
Net sales edged up 3% to $2,646,613,000 from $2,583,578,000. This increase was primarily due to higher fluid dairy volumes and increased sales at WhiteWave Foods, which were offset by the pass-through of lower raw milk and butterfat costs in the Dairy Group, Dean Foods said.
Dairy Group net sales for the second quarter grew 2%, totaling $2,267,527,000. The sales increase was primarily due to a 3.4% increase in fluid milk volumes. The Class I mover, which is an indicator of the company's raw milk costs, averaged $14.01 per cwt in the third quarter of 2005, 10% lower than the same period in 2004.
WhiteWave Foods posted third quarter net sales of $284,860,000, up 10% from the same period last year. The increase was driven by sales growth in most of the company’s core brands.
Mr. Engles estimated the increased costs of the third quarter would continue into the fourth, growing by between $35 million and $40 million. He forecast quarterly earnings from continuing operations and excluding certain items, in a range of 52c to 55c per share and full-year profit between $1.93 and $1.96 per share.
The full-year outlook, which is below its previous guidance of $1.97 to $2.02 per share, amounts to year-over-year growth of 14% to 16%.
The company also forecast 2006 earnings per share of $2.20 to $2.25 before stock option expensing, and estimated the impact of those expenses at 9c to 10 c per share.
From the beginning of the third quarter through Wednesday, Dean Foods made open market purchases of its common stock totaling 11.3 million shares for a total cost of $415 million. On Wednesday, the company’s board increased its repurchase authorization by an additional $300 million. Including the new authorization, Dean Foods currently has a total of $303 million remaining under its repurchase authorization.