Dean Foods Co. (DF), the largest U.S. dairy processor, cut its full-year earnings forecast after higher raw-milk costs squeezed margins and winter weather disrupted deliveries to schools.
Adjusted earnings per share will be at least 60c, the Dallas-based company said today in a statement, down from a February forecast of 73 cents to 86 cents.
Dean also reported a first-quarter net loss of 9 cents a share, compared with net income of $5.30 a year earlier. The loss from continuing operations excluding one-time items was 5 cents. The average of 11 analysts’ estimates compiled by Bloomberg was for earnings of 1 cent.
The shares dropped 6.5 percent to $14.35 at 8:24 a.m., before the start of regular trading in New York.
“We entered 2014 facing substantial margin pressure in our milk business as Class I raw milk prices have continued to reach all-time new highs,” Chief Executive Officer Gregg Tanner said in the statement.
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