Dean Foods Warns on Profit, Citing Milk Prices
Dean Foods said on Tuesday its full-year and second-quarter profit will be lower than expected, as raw milk prices reach all-time highs.
Dean Foods , the largest U.S. processor and distributor of milk and dairy products, said it expected adjusted earnings per share of 30 to 31 cents in the second quarter, and $1.52 to $1.58 per share for the full year.
Analysts, on average, were looking for 37 cents and $1.69 for the second quarter and full year, respectively, according to Reuters Estimates.
Raw milk prices are increasingly likely to reach all-time highs by the third quarter, which will be "particularly challenging," the company said in a statement.
The company's Horizon Organic brand, meanwhile, is facing a significant oversupply of raw organic milk, after a change in regulations, forcing lower prices, the company said before an investor presentation in Paris.
Profit growth should accelerate in 2008, as the company cuts costs and builds up its marketing, product development and sales operations, Dean Foods said.
Dean Foods shares closed at $32.46 on the New York Stock Exchange on Monday.