(AP) — NEWS: Dean Foods' third-quarter net income jumped, bolstered by a large gain from selling stock of its former subsidiary WhiteWave. Its adjusted earnings missed Wall Street's view, but revenue topped analysts' expectations.
The nation's largest milk processor lowered its full-year adjusted earnings forecast. Its stock fell in premarket trading on Tuesday.
Dean Foods also announced that its board adopted a dividend policy and that it is increasing its stock repurchase authorization to up to $300 million. In addition, the Dallas company is starting a cash tender offer for up to $400 million of its bonds.
DETAILS: Dean Foods, which completed a 1-for-2 reverse stock split earlier this year, plans on paying a quarterly dividend of 7 cents per share starting in 2014's first quarter.
The company behind multiple brands including its namesake, Meadow Gold, Garelick and Oak Farms said the tender offer is for its 2016 and 2018 bonds, with preference given to the 2018 bonds that carry a 9 ¾ percent interest rate. The offer is being funded with available cash and borrowings under its senior secured credit facility. The transaction is expected to close before year's end and to lower its interest expense in the future.
NUMBERS: Dean Foods earned $415.1 million, or $4.35 per share, for the three months ended Sept. 30. That compares with $36.4 million, or 39 cents per share, a year ago.
The current quarter included a $415.8 million gain on the sale of WhiteWave stock. Dean Foods spun off the organic dairy company, which makes Silk soy products and Horizon organic dairy products, in October 2012 to generate cash to pay down debt.
Taking out the gain on the WhiteWave stock sale, earnings from continuing operations were 12 cents per share. Its adjusted earnings were 14 cents per share in the prior-year period.
Analysts surveyed by FactSet expected earnings of 13 cents per share.
Revenue slipped 2 percent to $2.2 billion from $2.24 billion. This still topped Wall Street's estimate of $2.19 billion.
FUTURE: Dean Foods Co. now predicts full-year adjusted earnings of 85 cents to 91 cents per share. Its prior guidance was for 94 cents to $1.06 per share. The company anticipates fourth-quarter adjusted earnings of 17 cents to 23 cents per share.
Analysts expect fourth-quarter earnings of 28 cents per share and full-year earnings of 98 cents per share.
STOCK: The stock declined 60 cents, or 3 percent, to $19.11 in premarket trading. Shares closed Monday at $19.71, up 28 percent since the start of the year.