Dean Foods first quarter earnings down but CEO optimistic

Dean Foods Company has seen a drop in its earnings for the first quarter of 2011, according to the company. The US dairy giant reports that the company’s adjusted net income dropped to $25 million (EUR17.4m), compared to net income of $43 million in the prior year’s first quarter.
“Overall, the business is off to a stronger start than we had anticipated and we are somewhat encouraged as we look to the balance of the year,” says Gregg Engles, chairman and CEO. “While we have a long way to go at Fresh Dairy Direct-Morningstar, I am cautiously optimistic that the trajectory of our business is upward and that we are on a path for continued progress as we move through the balance of the year. In our other major segment, WhiteWave-Alpro continued to perform well, with both strong top and bottom-line growth against a tough overlap and unfavourable holiday calendar.”
Net sales for the first quarter totaled $3.05 billion, compared to $2.96 billion of net sales in the first quarter of 2010. Net sales for the first quarter increased due to strong sales growth at WhiteWave-Alpro and the pass-through of higher overall dairy commodity costs that were partially offset by soft volumes at Fresh Dairy Direct-Morningstar.
Fresh Dairy Direct-Morningstar fluid milk volumes decreased by 2.4% in the first quarter, compared to industry overall that experienced a volume decline of approximately 1.2% on a year over year basis, based on USDA data and company estimates. Total volumes from the segment declined 3.8% from the first quarter of 2010, including approximately 0.5% from the divestiture of the Mountain High yogurt business.