Dean Foods sees year-end income and sales dip

by FoodBusinessNews.net Staff
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DALLAS — Net income at Dean Foods Co. in the year ended Dec. 31 fell to $225,414,000, down 27% from income of $308,653,000 in fiscal 2005. Income was hurt by various costs, including losses from discontinued operations and the effect of accounting changes. Net sales for the year were $10,098,555,000, down 1% from $10,174,718,000 last year.

Dairy Group segment operating income rose 6% on the year, totaling $678,011,000. Net sales for the Dairy Group segment were $8,820,950,000, down 2% from 2005.

Operating income in the WhiteWave Foods segment was $139,352,000, an increase of 21% from 2005. Net sales for the year totaled $1,277,605,000, up 6% from last year.

For the fourth quarter ended Dec. 31, net income totaled $72,962,000, equal to 58c per share on the common stock, an increase of 10% from $66,174,000, or 51c, in the same period last year.

Net sales for the quarter totaled $2,593,838,000, down 1% from $2,615,612,000 in the fourth quarter of 2005. Net sales were negatively impacted by the pass-through of lower overall dairy commodity costs.

Dairy Group segment operating income in the fourth quarter was $172,133,000, an increase of 4% year-over-year. Segment operating income growth was driven by increased fluid milk volumes, a relatively favorable dairy commodity environment and improved operational efficiencies.

Net sales for the Dairy Group segment totaled $2,244,049,000, down 2% from the fourth quarter of 2005. The sales decrease was due primarily to the pass-through of lower overall dairy commodity costs to customers, offset by a 1% increase in fluid milk volumes.

The fourth-quarter average Class I mover, which is an indicator of the company’s raw milk costs, averaged $12.42 per cwt, a 12% decrease from the same period in 2005. Class II butterfat prices averaged $1.39 per lb in the fourth quarter, 16% lower than the fourth quarter of 2005.

Segment operating income in the fourth quarter for WhiteWave Foods was $46,791,000, up 25% from the fourth quarter of 2005.

Net sales for WhiteWave Foods totaled $349,789,000, up 5% from the same period last year.

"With solid growth in operating income expected from both our business segments this year, we are expecting earnings of $2.33 to $2.38 per share in 2007," said Gregg Engles, chairman and chief executive officer. "This represents growth of 10% to 12% over 2006 adjusted earnings."

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