RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing your 1 complimentary article.

Register now to receive full access.

Already registered?

Login | Join us now

Earnings miss sends Dean Foods shares tumbling

Twitter Linkedin eCard

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.

‘Favourable trends’

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

Twitter Linkedin eCard
Related Stories

Will protein prices fight back against fat in dairy markets?

Prices of fats remain elevated against protein values in dairy - at a time when the opposite is true in markets for oilseed products

World phosphate, potash shipments to grow in 2018, helped by Chinese needs

Mosaic forecasts further demand expansion, as it heralds a "transformational year" for its own fortunes, after a 2017 marred by a one-time tax charge

Deere lifts sales hopes - even as it unveils biggest loss in 25 years

The maker of John Deere tractors flags "strengthening" market conditions, but swallows a huge writedown prompted by US tax retorms

Plant Impact agrees takeover by Croda, after failure of Bayer contract

The crop enhancement group, floored by the failure of a supply deal with Bayer, agrees a takeover by a maker of chemicals from anti-wrinkle creams to floor coatings
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069