DF Dean Foods Company New

Dean Foods swung to a profit in its latest quarter and issued upbeat guidance for the current quarter and full year as sharply lower milk prices continue to buoy its business.

Shares jumped 7.4% in premarket trading, which would erase the stock's year-to-date loss notched through Friday's close if it opened that high.

The world's largest milk processor has been in the midst of a turnaround since 2013, when it spun off WhiteWave Foods Co., a fast-growing maker of almond milk and other dairy alternatives. Raw-milk prices spiked in 2013 through late 2014, crimping Dean's profit and further pressuring consumers' milk purchases. In the face of a more challenging environment, Dean has been cutting costs and earlier this year launched DairyPure, a new national brand that is an effort to bring Dean's array of about 30 brands under one banner.

Chief Executive Gregg Tanner credited the new brand and a 30% drop in the price of raw milk for Dean's better-than-expected third-quarter profit and optimistic outlook.

For the full year, Dean projects adjusted earnings of $1.15 to $1.25 a share, above the $1.05 analysts had anticipated. Dean said it expects to book 28 cents to 38 cents in adjusted profit per share in the December quarter, higher than the average analyst estimate of 24 cents a share.

In the latest quarter, Dean reported a profit of $20.2 million, or 22 cents a share, up from a loss of $16 million, or 17 cents, a year earlier. Excluding certain items, earnings rose to 30 cents a share from a loss of three cents a share in the year-ago quarter. Dean bought back about $53 million in stock during the quarter. The company's lower share count aided per-share earnings.

Revenue declined 14% to $2.03 billion. Analysts surveyed by Thomson Reuters had expected 24 cents in adjusted per-share earnings on $2.04 billion in sales.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

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(END) Dow Jones Newswires

November 09, 2015 10:05 ET (15:05 GMT)

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