Retail

Dean Foods, From Earnings To Spilled Milk (DF)

The stock market may be challenging 2-year highs, but not Dean Foods Company (NYSE: DF).  Dean Foods is hitting 52-week lows if the pre-market activity remains at current levels.  The company reported that profits were cut in half and it…

By Jon C. Ogg
Published November 9, 2010, 9:28am ET · 1 min read

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The stock market may be challenging 2-year highs, but not Dean Foods Company (NYSE: DF).  Dean Foods is hitting 52-week lows if the pre-market activity remains at current levels.  The company reported that profits were cut in half and it also announced that CFO Jack Callahan will resign his post. Dean Foods missed earnings by a wide margin at $0.13 EPS as revenues rose 10.5% year over year to $3.05 billion; Thomson Reuters had estimates of $0.21 EPS and $3.04 billion in revenues.

Unfortunately, Dean Foods also released downward guidance for the coming quarter.  It now sees $0.13 to $0.18 EPS versus a $0.27 Thomson Reuters consensus.

The company noted that its Fresh Dairy Direct-Morningstar business will remain challenged as the retail environment continues to be very competitive and volumes across much of the portfolio are soft.  The company sees that pressure continuing in the fourth quarter and at least through the first half of next year.

Another issue is that price concessions already given will continue to pressure comparisons year over year regardless of whereprices go.

Dean Foods closed at $10.36 Monday and the prior 52-week trading range is $9.38 to $18.79; the pre-market levels right before the open have shares down around $8.75 on nearly 1 million shares.  It looks like Dean Foods will be hitting fresh lows during a strong stock market.

JON C. OGG

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Jon C. Ogg

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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