Updated from 12:30 p.m. EST
Pickles proved to be the downfall of
, as lower prices for the crunchy snack caused the company to miss Wall Street's estimates.
Shares of Dean Foods dropped 3 1/2, or 13%, to close at 24, even though the company's earnings had more than tripled. The stock has fallen 31% in the last three months.
"Results were still below management's expectations due to lower results in our pickles segment," said Howard Dean, chairman and chief executive of Dean Foods, in a statement. "Very aggressive promotion by the branded market leader in pickles has depressed pricing, a condition we expect will carry over into our fourth quarter." He was referring to rival
Vlasic Foods International
In a conference call with analysts, however, Dean said the company should be on track to meet analysts' earnings estimates of 82 cents a share in its fourth fiscal quarter.
For the third fiscal quarter ended Feb. 27, earnings rose to $25.18 million, or 67 cents a diluted share, from $8 million, or 20 cents a share a year earlier, excluding a charge taken for the closing of a plant. The results in the latest quarter were 4 cents lower than the 71-cent consensus estimate of analysts polled by
First Call/Thomson Financial
Revenue fell to $976.82 million from $995.17 million a year ago.
Pickle earnings fell 40%, to $5.44 million, from $9.07 million a year earlier. Meanwhile, earnings in the core dairy business of Dean, based in Franklin Park, Ill., more than quadrupled to $36.4 million from $6.73 million in the year-earlier period.
Dean Foods is a diversified dairy and specialty food processor, with a pickle division that produces regional brand and private-label pickles, relishes and peppers.