DALLAS — Continuing volatility in commodity markets and interest expense were factors leading to a 52% decrease in net income for Dean Foods Co. in the first quarter.
For the first quarter ended March 31, the company posted net income of $30,772,000, equal to 22c per share on the common stock, compared with income of $63,820,000, or 50c per share, during the same quarter of the previous year.
"On the heels of the most challenging year in our history, I am pleased with the progress we’ve made in the first quarter of this new year across our business," said Gregg Engles, chairman and chief executive officer. "While we expect continued challenges in the balance of 2008, we believe the difficulties of last year have strengthened our ability to navigate the continued volatility we anticipate in the commodity markets going forward."
The DSD Dairy segment posted operating income of $130,908,000, down 15% from $153,650,000 during the same quarter of the previous year. Net sales in the segment were $2,458,476,000, up 17% from $2,100,066,000 during the same quarter of 2007.
The WhiteWave-Morningstar segment posted operating income of $45,392,000, up slightly from $45,178,000 during the same quarter of 2007. Sales in the segment were $618,484,000, up 17% from $529,683,000 during the same quarter of the previous year.
"It’s clear that our results this year will largely be driven by the commodity markets, which will remain highly unsettled and inflationary," Mr. Engles said. "Longer term, we expect our transformational efforts to increasingly drive our results."
The company said it expects the conventional commodity markets to remain volatile in the second quarter and for the organic milk market to shift from a state of oversupply to undersupply. As a result, the company is anticipating adjusted earnings per share for the second quarter in the range of 26c to 31c per share. For the full-year 2008, Dean Foods is expecting adjusted earnings per share of at least $1.20.