Dean Foods Co. (DF) on Wednesday reported a loss for the fourth quarter that narrowed from last year, reflecting a turnaround to profit at its fluid milk business and continued efforts to control costs.
The Texas-based dairy processor's shares are gaining 11 percent in the regular session as its adjusted earnings beat analysts' expectations and the company forecast earnings for the first quarter as well as fiscal 2012 in line with analysts' estimates.
Dean Foods has been grappling with rising dairy and overall commodity costs by raising prices and cost-cutting efforts.
Gregg Engles, chairman and CEO of Dean Foods, noted that after two years of significant pressure on the fluid milk business, continued efforts to reduce costs and the stabilization of milk costs led to a return to year-over-year profit growth in the fourth quarter at the Fresh Dairy Direct segment.
The company's fourth-quarter net loss was $9.87 million or $0.05 per share, narrower than loss of $20.74 million or $0.11 per share in the prior-year period.
However, adjusted earnings rose to $50.63 million or $0.27 per share from $26.78 million or $0.15 per share in the year-ago period.
On average, analysts polled by Thomson Reuters estimated earnings of $0.23 per share. Analysts' estimates usually exclude special items.
Net sales for quarter grew 4.8 percent to $3.30 billion from $3.15 billion in the year-ago period, but missed analysts' consensus estimate of $3.34 billion.
The prior-year quarter's results include higher facility closing and reorganization costs as well as litigation settlements. The company also recorded an income tax benefit in the quarter compared to income tax expense in the year-ago period.
Looking ahead to the first quarter, Dean Foods forecasts adjusted earnings between $0.18 and $0.23 per share. Analysts expect earnings of $0.19 per share for the quarter.
For fiscal year 2012, the company forecasts earnings in a range of $0.87 to $0.95 per share. Analysts expect the company to earn $0.89 per share.
In Wednesday's session, DF is trading at $12.17, up $1.30 or 11.96 percent on a volume of 297,215 shares.
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