Wednesday, Dean Foods Co. (DF) reported higher earnings in the second quarter, helped by sales growth in its DSD Dairy and WhiteWave- Morningstar segments and lower interest expense. On an adjusted basis, earnings per share from continuing operations rose from last year and came in above analysts' forecast. The Dallas-Texas-based food and beverage company provided third quarter guidance and confirmed fiscal 2008 adjusted earnings outlook.
The company's second-quarter net income was $48.86 million, or $0.31 per share, compared to $28.42 million, or $0.21 per share, a year ago.
Net income from continuing operations rose to $48.9 million or $0.31 per share, from $28.2 million or $0.21 per share, in the same quarter last year.
On an adjusted basis, Dean Foods' net income from continuing operations increased to $52 million, or $0.33 per share, from $41.6 million, or $0.30 per share, in the year-ago quarter. Analysts expected earnings of $0.32 per share of the quarter.
The company attributed the adjusted earnings growth to improved performance in the DSD Dairy segment and lower interest expense, offset by an increase in diluted shares outstanding.
Quarterly net sales increased 9% to $3.10 billion from $2.84 billion last year. Analysts projected revenues of $3.15 billion. The sales growth was primarily due to the pass-through of higher dairy commodity costs and volume growth in DSD Dairy and continued strong sales growth at WhiteWave- Morningstar.
DSD Dairy net sales rose 9% to $2.5 billion from $2.3 billion in the second quarter of 2007. The WhiteWave-Morningstar segment reported net sales of $652.3 million in the quarter, up 10% from $590.9 million in the previous year.
Among Dean Foods' competitors, Kraft Foods Inc. (KFT) on July 28, reported an almost 4% increase in its profit for the second quarter from a year ago, helped by commodity hedging activities and pricing actions that offset higher input costs. The Northfield, Illinois-based company's revenue was up 21.4%.
Another peer, ConAgra Foods, Inc. (CAG) is scheduled to announce its first-quarter results on September 18. Analysts are of the view that the company will earn $0.29 per share on sales of $2.81 billion.
For the first half of fiscal 2008, Dean Foods earned $79.66 million, or $0.53 per share, lower than $92.22 million, or $0.68 per share, reported a year ago.
Net income from continuing operations for the first half declined to $79.7 million from $91.4 million in the first six months of 2007. Earnings per share from continuing operations were $0.53, compared to $0.67 a year ago.
On an adjusted basis, net income from continuing operations for the period fell to $84.5 million, or $0.56 per share, from $108.7 million, or $0.80 per share, in the previous year.
Net sales reached $6.18 billion in the first-half, up from $5.47 billion in the prior-year period.
Looking ahead, the company expects third-quarter adjusted earnings per share in the range of $0.26 - $0.31. The company also continues to expect fiscal 2008 adjusted earnings of at least $1.20 per share. Analysts foresee earnings of $0.32 per share for the third quarter and $1.26 per share for full-year 2008.
"Overall, we are cautiously optimistic about the back half of the year," said Gregg Engles, chairman and chief executive officer of Dean Foods. Engles also expects that the DSD Dairy segment will continue to perform well in the third and fourth quarters.
DF is trading at $21.26, down $2.06, on a volume of 1.92 million shares.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.