Dean Foods' income falls as dairy revenues dip
August 02, 2006
by FoodBusinessNews.net Staff
DALLAS — For the second quarter ended June 30, net income at Dean Foods Co. fell significantly as dairy revenues fell and the company incurred charges related to its restructuring efforts.
Net income for the period totaled $28,868,000, compared with net income of $81,626,000 in the same period last year.
Net revenue for the quarter fell 1% to $2,477,884,000, compared with revenue of $2,515,130,000 in the second quarter of 2005.
Dairy Group net revenue was $2.17 billion, down 3% from the prior year second quarter. The sales decrease was due to the pass through of lower dairy input costs that were partially offset by a 2% increase in fluid milk volumes.
The second quarter Class I mover, which is an indicator of the company's raw milk costs, averaged $10.98 per cwt, a 23% decrease from the same period in 2005. Class II butterfat prices averaged $1.25 per lb in the second quarter, also 23% lower than the second quarter of 2005.
WhiteWave Foods reported second-quarter net sales of $307 million, a 7% increase compared with second quarter 2005 net sales of $288 million. The percentage increase was driven by strong sales growth in the continuing branded portfolio, partly offset by the stock-keeping unit reduction activities undertaken late in 2005.
"I am pleased with the direction and momentum of our businesses," said Gregg Engles, chairman and chief executive officer. "Our Dairy Group continues to outperform the industry, increasing market share and growing operating profits. At WhiteWave, our brands continue to demonstrate robust growth, and we believe our supply chain and information technology initiatives are on track to deliver significant operating benefits in the future."
The company projected earnings of 54c to 56c per share for the third quarter and reiterated its full-year guidance of $2.10 to $2.15 per share.