Shares in Dean Foods slumped more than 20% after the company missed analysts' third quarter earnings forecasts, and braced for a series of headwinds to progress next year.
The group, the largest US dairy processor, reported earnings of $37.8m, equivalent to $0.24 a share, for the July-to-September quarter, a rise of nearly six times from the same period last year.
The increase reflected lower commodity costs - Dean's chosen benchmark of Class I milk futures fell 12% year on year - and a reduction in interest charges after a debt reduction programme.
However, the rise fell short of investors' expectations of earnings of $0.31 a share, according to a Reuters poll.
Dean's forecast of mid-teens growth next year on 2008 earnings per share of "at least" $1.20 also disappointed analysts. The forecast implies earnings per share of roughly $1.40 a share next year compared with a consensus forecast of $1.59 a share, according to Reuters.
Dean shares stood $4.68, or 21%, lower at $17.48 in lunchtime trading in New York.
Jack Callahan, the group's chief financial officer, said Dean felt "very good" about its performance in third and current quarters.
"We enter the fourth quarter with favourable commodity and business trends," he added.
However, the group warned that next year's earnings would be hurt by roughly 3 cents a share by extra pension costs stemming from the financial market turmoil, and 6 cents a share by investment in a Fruit2Day chilled fruit joint venture with Switzerland's Hero Group.
The group also announced "selective investments" in areas such as its supply chain and product research, and noted that competitive pressures had "clearly increased".
By Mike Verdin