The largest U.S. dairy processor says it's operating in the most difficult environment in its history.
Aug. 11 -- Dean Foods Co., the largest U.S. dairy processor, withdrew its full-year earnings forecast as it said the company is operating in the most difficult environment in its history.
"The balance of the year appears rocky, with a continued unpredictable and volatile dairy commodity environment," Chief Executive Officer Gregg Tanner said today in the Dallas-based company’s second-quarter earnings statement. "For the time being, we are going to provide specific guidance only for the next quarter, where our visibility is better."
Dean forecast an adjusted third-quarter net loss of 5 cents to 15 cents a share. That compares with a 24-cent profit, based on the average of 11 analysts’ estimates compiled by Bloomberg.
The company is battling higher prices for raw milk. Class I Mover, a measure of raw milk costs, was on average 31 percent higher in the second quarter compared with a year earlier, Dean said today.
Dean fell 6.8 percent to $14.73 at 10:05 a.m. in New York. The shares earlier fell 10 percent, the most intraday since February.
In May, Dean said full-year earnings excluding one-time items would be at least 60 cents a share, down from a February forecast of 73 cents to 86 cents.
"As a result of the extreme dairy commodity environment, we face unprecedented challenges," Chief Financial Officer Chris Bellairs said in today’s statement.