Shares of the nation's biggest dairy company and of one of the largest wholesale bakeries dropped Thursday after both fell short of analysts' second-quarter predictions.

Despite an increase in profit,

Dean Foods

(DF) - Get Report

missed analysts' estimates, and said it expects raw milk prices to rise in the coming months, which it factored into its lowered full-year guidance.

Dean closed down $1.17, or 4%, at $27.96.

The Dallas-based dairy company earned $83.8 million, or 54 cents a share, compared with $73.2 million, or 48 cents a share, a year earlier. Excluding items, the company earned $85.6 million, or 56 cents a share, from $77.3 million, or 51 cents a share, a year ago. Analysts were expecting 57 cents a share.

Total sales were $2.2 billion, down 3% from last year.

In June, Dean acquired Melody Farms of Livonia, Mich., and on June 30, the company said it

signed an agreement to buy

Horizon Organic Holdings

(HCOW)

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for $24 a share.

Looking to the full year, the company expects to earn $2.03 to $2.07 a share, including the effect from the sale of a frozen-foods business. Previously, the company expected to earn $2.07 to $2.11 a share. Analysts are looking for $2.10 a share.

Dean projected third-quarter earnings of 51 cents to 53 cents a share, and the company estimated fourth-quarter earnings of 54 cents to 56 cents a share. Analysts are calling for 54 cents a share in the third quarter and 56 cents a share in the fourth quarter.

Meanwhile, shares of wholesale bakery company

Flowers Foods

(FLO) - Get Report

fell 3.7% after the company swung to a second-quarter loss, hurt by charges associated with discontinuing certain operations.

Still, the company confirmed its expected full-year sales. Shares were down 75 cents at $19.60.

Including charges, Flowers lost $9.3 million, or 20 cents a share, compared with earnings of $6.1 million, or 13 cents a share, in the year-ago quarter. Results for the latest quarter included charges of $23.1 million, or 50 cents a share, from discontinued operations.

Flowers said income from continuing operations was $13.8 million, or 30 cents a share, compared with $13.5 million, or 30 cents a share, last year. Analysts were expecting the company to earn 32 cents a share.

Sales from continuing operations rose 6.1% to $337.2 million from $317.9 million for last year's second quarter. Flowers said its bakeries group had strong results, helped by sales of Nature's Own and Cobblestone Mill breads.

Flowers reaffirmed its expected 2003 sales of $1.4 billion to $1.45 billion. Analysts are calling for revenue of $1.40 billion.