Dean Foods Co.'s profit topped expectations in the second
quarter, as resilience in its pricing helped to offset declining
volumes.
Still, revenue slid more than Wall Street had expected.
Dallas-based Dean has suffered from a decadeslong decline in per
capita U.S. milk consumption, which was compounded starting in 2013
by a nearly two-year spike in the price of raw milk that pinched
profits. As a result, the company has been closing factories and
slashing other costs.
While milk consumption has continued to slide, raw milk prices
have fallen sharply since last fall, bolstering Dean Foods'
prospects.
The results Monday come after Dean Foods announced late Friday
that its chairman had resigned. The company gave no explanation for
the departure of Tom C. Davis, who has been nonexecutive chairman
since 2013.
In the latest quarter, raw milk costs tumbled 33% from a year
earlier, while total volume fell 3% to 653 million gallons. The
company had expected volume to decline in the low-single
digits.
In all, Dean reported a profit of $26.5 million, or 28 cents a
share, compared with a loss of $645,000, or a penny a share, during
the same period a year earlier.
Excluding special items, Dean reported adjusted earnings of 33
cents a share. Dean had projected an adjusted per-share profit of
20 cents to 30 cents.
Revenue fell 16% to $2.01 billion, below the $2.06 billion
analysts polled by Thomson Reuters had expected.
For the current quarter, Dean Foods forecast per-share earnings
of 17 cents to 27 cents a share in earnings, while analysts were
calling for 21 cents a share. The company forecast a low-single
digit decline in volume and a slight increase in raw milk
costs.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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