Dean Foods Co. (DF), the largest U.S. dairy processor, forecast first-quarter earnings that trailed analysts’ estimates as unexpectedly high raw-milk prices and lower sales volumes squeeze margins.
Profit excluding one-time items will be break even plus or minus 3 cents a share, the Dallas-based company said today in a statement. That missed the 27-cent average of 10 estimates compiled by Bloomberg.
Dean dropped 12 percent to $13.40 at 8:46 a.m., before the start of regular trading in New York.
“The consensus view of the dairy commodity outlook for 2014 appears to be more challenging than previously expected,” Chief Executive Officer Gregg Tanner said in the statement. “Dairy commodity prices have moved near or beyond all-time highs despite strong global production growth.”
Dean had a fourth-quarter net loss of 40 cents a share compared with net income of 30 cents a year earlier. Excluding one-time items, per-share profit was 18 cents, matching the average of 12 estimates.
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