DALLAS (AP) — Dean Foods Co. shares soared Monday after the dairy company reported a much smaller loss than expected for its third quarter and projected a profit for the fourth quarter and a smaller loss than expected for the full year.
The company said that it has been coping with its most difficult operating environment ever, due in large part to challenging dairy commodity prices. But Dean Foods said that it believes it is on the path to rebuild its profitability in 2015.
The Dallas-based company is the nation's largest processor of milk for retailers, it also makes and distributes ice cream, cultured products, juices, teas, and bottled water.
Dean Foods reported a loss of $16 million in its third quarter, or 17 cents per share. On an adjusted basis, it lost 3 cents per share. That beat Wall Street expectations. Analysts surveyed by Zacks Investment Research had forecast a loss of 13 cents per share.
It reported revenue of $2.37 billion for the period, also topping Street forecasts. Analysts expected $2.36 billion, according to Zacks.
The company warned that it expects raw milk costs will remain high in the fourth quarter, despite waning demand. And it does not anticipate any pricing relief until next year.
Dean said that it expects to earn between 5 cents and 15 cents for its current quarter. Analysts were anticipating a loss of 2 cents per share, according to FactSet. For the full year, Dean forecast an adjusted loss in the range of 6 cents to 16 cents per share. Analysts polled by FactSet had forecast a loss of 33 cents per share.
Dean Foods shares soared 13.3 percent to $16.33 in afternoon trading on Monday. Its share price has fallen 16 percent since the beginning of the year.