Shares of the nation’s largest milk processor and distributor Dean Foods were down 6% after reporting a wider than expected quarterly loss and saying, “the balance of the year appears rocky.”
In the second quarter, Dean Foods lost $US0.14 per share, excluding certain items, compared to expectations for a loss of $US0.06. Revenue in the quarter totaled $US2.39 billion, better than the $US2.32 billion expected by analysts.
“The second quarter was even more challenging than we had originally anticipated. This is by far the most difficult operating environment in the history of the company, reinforcing the importance of the initiatives we have underway,” Gregg Tanner, Chief Executive Officer of Dean Foods, said in a press release.
Dean Foods also said that the cost of milk in the second quarter was the highest in U.S. dairy industry history. In the second quarter, Dean Foods said average Class I Mover, a measure of raw milk costs, was $US23.66 per hundred-weight, up 31% from last year and up 6% from the first quarter.
The company’s outlook was also discouraging. Tanner said, “The balance of the year appears rocky, with a continued unpredictable and volatile dairy commodity environment. That makes it difficult to provide guidance beyond the immediate quarter.”
“While we hope to see a more positive environment later in the year, the uncertainty surrounding whether or when that will occur leads us to withdraw our full year guidance for the present time,” Tanner added.
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