Dean Foods Posts Gains on Lower Milk Prices

Dean Foods says first-quarter profit more than doubles on lower milk costs and interest expenses.
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Dairy company

Dean Foods

(DF) - Get Report

said its first-quarter profit more than doubled on lower milk costs and interest expenses.

During the quarter, the company earned $76.2 million, or 48 cents a share, from $30.8 million, or 21 cents a share, a year earlier.

Excluding one-time items, the company earned 52 cents a share. Analysts expected earnings of 42 cents a share.

Sales fell 12% to $2.7 billion.

Milk prices have fallen sharply over the past year, after hitting highs in 2007. Prices are down 37% in the quarter from a year ago and 26% lower than the fourth quarter. Butter prices are down about 10% from a year ago and 26% from the fourth quarter.

Shares of Dean Foods have been among the best performers in the food sector this year, rising 15%.

The company maintained its full-year outlook of $1.55 a share. Last year the company earned $1.20 a share. For the second quarter the company expects earnings of 38 cents a share.

Separately, Dean Foods said it will issue 22.5 million shares of common stock, including an option for the underwriters to buy up to 3.38 million additional shares.

Shares of the company were down 5% to $19.72 in morning trading.

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