Dean Foods Q3 Results Miss View, Lowers FY17 Outlook

(RTTNews) - Dairy producer Dean Foods Co. (DF) on Tuesday reported a fall in profit for the third quarter from last year, reflecting impairment costs as well as lower sales and volume. Both revenue and adjusted earnings per share for the quarter missed analysts' expectations. Looking ahead, the company lowered the top end of its earnings outlook range for fiscal 2017.

Net income for the third quarter was $1.38 million or $0.02 per share, down sharply from $14.53 million or $0.16 per share in the prior-year quarter.

Excluding items, adjusted earnings from continuing operations for the quarter were $0.20 per share, compared to $0.37 per share in the prior year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined slightly to $1.94 billion from last year's $1.96 billion. Wall Street expected revenues of $1.98 billion.

Total operating costs and expenses for the quarter decreased 1.6 percent from last year to $439.53 million. The latest quarter's results include impairment of long-lived assets of $24.97 million.

Total volume across all products was 608 million gallons for the quarter, representing a 6.6 percent decline from the year-ago period.

Based on fluid milk sales data published by the USDA through August, U.S. fluid milk volume decreased 2.2 percent year-over-year quarter to date on an unadjusted basis. On this same basis, Dean Foods' share of U.S. fluid milk volumes decreased by 50 basis points year-over-year.

Raw milk costs in the quarter increased roughly 7 percent from the second quarter and also increased 10 percent from the same period last year.

For fiscal 2017, Dean Foods lowered its outlook for adjusted earnings to a range of $0.80 to $0.90 per share from the prior range of $0.80 to $0.95 per share. The Street estimates earnings of $0.80 per share for the year.