Dean Foods Co. (NYSE:DF) posted a loss for the third quarter from a profit last year, hit by impairment charges and its shares fell 2.5 percent to $10.21 in Wednesday's pre-market trading.
GAAP net loss was $1.55 billion or $8.39 per share for the third quarter, compared with profit of $24.3 million or $0.13 per share in the year-ago quarter. Quarterly loss included goodwill impairment charges of $1.9 billion.
On an adjusted basis, the Dallas, Texas-based food and beverage company said earnings per share increased 39 percent to 18 cents from 13 cents.
Net sales rose to $3.4 billion from $3.0 billion, driven by the pass-through of higher dairy and overall commodity costs at its Fresh Dairy Direct-Morningstar segment and continued solid sales growth at its WhiteWave-Alpro segment, it said.
Analysts, on average, polled by Thomson Reuters expected the company to earn $0.15 per share on revenue of $3.32 billion.
"The third quarter marks a return to growth for Dean," said Gregg Engles, Chairman and CEO. "While Fresh Dairy Direct continued to face challenges in the quarter, WhiteWave-Alpro posted exceptional results and corporate costs declined due to our focus on reducing SG&A costs, resulting in the return to growth in the quarter."
Dean Foods said it expects difficult volume and pricing environment at its Fresh Dairy Direct-Morningstar to continue into the fourth quarter.
Fresh Dairy Direct-Morningstar is a processor and distributor of milk and other dairy products in the United States, with products sold under more than 50 local and regional brands and a range of private labels. WhiteWave-Alpro markets and sells a variety of dairy and dairy-related products.
Looking ahead, Dean Foods said it expects fourth quarter adjusted earnings per share to step up from third quarter levels to between $0.20 and $0.25 per share resulting in full year earnings per share of between $0.69 and $0.74 per share. Analysts expect earnings of $0.23 for the fourth quarter and $0.69 per share for the full year.
DF ended Tuesday's regular trading session at $10.48. The stock has been trading in the 52-week range between $7.13 and $13.90.