* Third-quarter adj EPS 33 cents vs Wall St est 26 cents
* Sees fourth-qtr EPS of 27-32 cents vs est 26 cents
* Raises full-year EPS view to $1.27-$1.32 vs est $1.19
* CFO, general counsel stepping down
By Martinne Geller
Nov 8 Dean Foods Co on Thursday reported
a better-than-expected quarterly profit and raised its full-year
outlook as strong sales of soy milk and other products offset
declines in its fresh dairy business, sending its shares up
nearly 3 percent.
Dean, which spun off part of its business last month into
WhiteWave Foods Co and is weighing a sale of its
Morningstar unit, said that Chief Financial Officer Shaun Mara
and General Counsel Steve Kemps will leave the company after the
end of the year to pursue other opportunities.
The resignations will follow last month's change at the top
of the company after CEO Gregg Engles stepped aside in order to
lead WhiteWave. He remains Dean's chairman. Gregg Tanner,
formerly president of Dean's Fresh Dairy Direct business, became
Chris Bellairs, currently CFO of the fresh dairy business,
will take over as CFO of Dean Foods. Rachel Gonzalez, deputy
general counsel, will take over as general counsel.
Dean also said on Thursday the Morningstar sale process was
ongoing and it would make an announcement if a deal is reached.
The sale of Morningstar would "serve to further deleverage Dean
Foods and significantly increase financial flexibility going
forward," said Engles.
With higher growth and higher returns on capital, the
Morningstar business should trade at a higher multiple than the
fresh dairy business, Engles said. The best way to unlock that
value to shareholders is through a sale, he said.
PROFIT TOPS VIEW
Dean reported third quarter net income $36.4 million, or 20
cents per share, compared with a net loss of $1.5 billion, or
$8.39 per share, a year earlier, when it took a $1.9 billion
goodwill impairment charge to write down the value of its
then-struggling fresh-dairy business.
Excluding facility closing and reorganization costs and
other items, Dean earned 33 cents per share, handily topping
analysts' average estimate of 26 cents, according to Thomson
Sales fell 8 percent to $3.14 billion, missing analysts'
target of $3.23 billion.
The WhiteWave-Alpro segment grew net sales 13 percent,
helped by strong sales of Silk soy and almond milks. Sales
volume in the Morningstar business rose 6 percent.
Excluding lost sales from a recent divestiture, volume in
the Fresh Dairy Direct business declined 1.4 percent, though
Dean said that outperformed the overall industry.
That business, which sells fresh milk under a variety of
regional brands, would be what remains of Dean if it spins off
the remainder of WhiteWave, which also sells Horizon Organic
dairy products, and sells Morningstar, maker of mostly private
label dairy products.
That fresh dairy business has been under pressure for years
due to higher ingredient costs and falling prices.
The company raised its full-year adjusted earnings forecast
to between $1.27 and $1.32 per share, from its previous range of
$1.18 to $1.28. Analysts were looking for a profit of $1.19,
according to Thomson Reuters I/B/E/S.
Dean expects fourth-quarter adjusted earnings of between 27
cents and 32 cents per share, largely above analysts' estimates
of 26 cents.
Shares of the company were up 43 cents, or 2.7 percent, at
$16.51 on the New York Stock Exchange. They had fallen 12
percent since the IPO of WhiteWave.