CORRECTED - CORRECTED-UPDATE 1-Dean Foods Q2 profit tops market, forecasts t

Tue Aug 3, 2010 10:29am EDT

(Corrects headline, third bullet and paragraph 1 to say company's third-quarter profit view is largely below market estimates)

* Q2 adj EPS $0.29 vs est $0.25

* Sales rise 11 pct

* Says conventional dairy business stays troubled

* Q3 profit view largely below estimates

Aug 3 (Reuters) - Dean Foods Co (DF.N) reported lower quarterly profit as milk prices continued to be pressured by private label brands, but it still beat market estimates.

However, the company's profit view for the third quarter was largely below Wall Street expectations. [ID:nASA00LJF]

The largest U.S. dairy company said profit for the second quarter was $44.8 million, or 25 cents per share, compared with $64.1 million, or 38 cents per share, a year earlier.

On an adjusted basis, it earned 29 cents a share.

Analysts on average expected 25 cents per share, according to Thomson Reuters I/B/E/S.

Sales rose 11 percent to $2.95 billion.

The company also said conventional dairy business remains challenged. Retailers will often cut prices on staples like milk, making little or no profit, in hopes of making their money on other items shoppers buy.

In May, Dean withdrew its full-year earnings forecast following an unexpectedly sharp drop in profit for the first quarter.

Shares of the company closed at $11.74 Monday on the New York Stock Exchange. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Gopakumar Warrier)

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