DALLAS — Dean Foods Co. had net income of $63,820,000 during the first quarter ended March 31, equal to 50c per share on the common stock, up 21% $52,792,000, or 39c per share, during the same quarter of the previous year.
Net sales were $2,629,749,000, a 5% increase compared with sales of $2,509,041,000 during the same quarter of the previous year.
"I’m pleased with our results for the first quarter," said Gregg Engles, chairman and chief executive officer. "The Dairy Group continued its trend of solid volume and operating income growth, and WhiteWave Foods posted balanced growth across our core branded portfolio while leveraging operational efficiencies to achieve 25% growth in operating income for the quarter."
Operating income for the dairy group was $171,053,000, which was up 9% compared with $156,632,000 during the same quarter of the previous year. About half of this growth was a result of a settlement with a grocery customer releasing some stores they had sold from a supply agreement with the company. Net sales for the dairy group rose 5% to $2,307,062,000, which compared with $2,207,660,000 during the same quarter of the previous year. The sales increase was attributed to higher volumes and the pass-through of higher overall dairy commodity costs to consumers.
Operating income for WhiteWave Food Co. was $27,775,000, a 3% increase compared with $22,213,000 during the same quarter of the previous year — a result of higher sales volumes and increased efficiency in operations. Net sales for WhiteWave rose 7% to $322,687,000, which compared with $301,381,000 during the same quarter of 2006.
Mr. Engles said the company would invest in Horizon Organic milk during the reminder of the year to strengthen the business as the industry-wide supply of raw organic milk has increased significantly this year.
"We are increasingly concerned about rising industry estimates for conventional dairy commodity price increases through the rest of the year," Mr. Engles said. "In the past, our dairy group has generally been very effective at passing through changes in the underlying commodities. However, with expectations for consistently increasing prices throughout the remainder of 2007, we expect some challenges in the business, making us more cautious as we move forward."