Dean Foods now expects to earn between 67 and 75 cents per share this year, up from its prior outlook for a profit of 55 to 65 cents per share. The guidance came in far ahead of analysts' call for 2011 earnings of 58 cents per share.
Investors, clearly pleased with the profit outlook, bid Dean Foods shares 13.9% higher to trade at $12.51 in morning trading Tuesday. More than 3.6 million shares changed hands less than 30 minutes into the trading session, compared with their average daily volume of just 3.5 million.
Dean Foods said it worked more aggressively to cut expenses in the recent quarter as commodity costs continued to rise. The producer of milk, dairy and dairy-related products cut 140 jobs, and expects to more than double its earlier goal of cutting $30 million in selling, general and administrative expenses from 2010.
As a roster of food and beverage companies have also announced, Dean Foods said it may raise prices on some products to offset rising costs, and has already been able to pass on some costs to consumers at its Fresh Dairy Direct-Morningstar segment, where demand was softer in the recent period. At its WhiteWave-Alpro business, which sells Horizon Organic milk and Land O'Lakes butters and creamers, sales rose 7% to $507 million.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV