Why Dean Foods (DF) Stock Continues To Decline Today

NEW YORK (TheStreet) -- Shares of Dean Foods Co.  (DF) are down -6.14% to $14.87 after the milk processor withdrew its full-year profit forecast, saying raw milk prices remained "unpredictable and volatile."

Shares of the company fell as much as 10% after it also reported a greater than expected second quarter loss, Reuters reports.

In the quarter, U.S. raw milk prices jumped 6% from the first quarter and 31% from a year ago to a record high of $23.66 per hundred-weight.

 
Milk sales remained weak in the second quarter, CEO Gregg Tanner said on a conference call. There was also margin pressure in products such as ice creams and cottage cheese as prices of butterfat, a key ingredient, jumped 32%.
 
"This is by far the most difficult operating environment in the history of the company," Tanner said in a statement.
 

TheStreet Ratings team rates DEAN FOODS CO as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate DEAN FOODS CO (DF) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself."

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