Dean Foods Net Income Sinks, Suspends Guidance
May 13, 2010
The Associated Press reports that Dean Foods Co. reported a 43 percent drop in its first quarter net income as its private-label milk business was hurt by price competition and suspended its full-year earnings forecast on Monday, sending its shares into a tailspin. The food and beverage company said it was also cutting 350 to 400 jobs from its Fresh Dairy Direct-Morningstar unit in an attempt to lower costs. Its shares careened 28 percent, dropping $4.16 to $10.47 on heavy volume. Earlier in the session, shares set a new 52-week low of $10.35. Dean Foods said its private label milk business was hurt by lower-priced competitors appealing to budget-conscious shoppers. People have been trading down to less, expensive off-branded products to save money as they try to stretch their budges. The company suspended its 2010 guidance in part because of unstable retail pricing in its Fresh Dairy Direct-Morningstar division. The Fresh Dairy Direct-Morningstar unit markets milk, creamer, and cultured dairy products under more than 50 local and regional dairy brands as well as private labels. The company''s WhiteWave-Alpro segment sells organic products, ice creams, soy and plant-based beverages, including Silk soy and almond milk, Horizon Organic milk and dairy products and International Delight coffee creamers.