DALLAS (AP) — Shares of Dean Foods Co. jumped 9 percent Wednesday after the nation's biggest dairy company said its first-quarter profit rose sharply on higher sales. The company also predicted second-quarter and full-year profits will come in above Wall Street expectations.
The company said its first-quarter profit widened in part because unexpectedly strong demand for dairy products like yogurt, milk and ice cream boosted its revenue.
The company said fluid milk sales rose 2 percent after excluding the impact of a plant sale in Wisconsin, while fluid milk operating income jumped 18 percent to $101 million in the quarter.
Dean Foods said it expects the demand to keep steady. The company said lower interest expenses and continued costs cutting should help boost profits in the full year and current quarter.
"Given our significant momentum in the first quarter, the cautious optimism that we expressed last quarter has turned less cautious," CEO Gregg Engles said in a statement.
The company said it expects adjusted net income in the second quarter to be between 28 cents per share and 33 cents per share. That's well above the adjusted net income of 22 cents per share that analysts were expecting, according to a survey by FactSet.
The company boosted its full-year profit forecast to adjusted net income between $1.10 per share and $1.20 per share. That's up from its previous forecast of between 87 cents and 95 cents per share. Analysts were expecting 97 cents per share.
During the quarter that ended March 31, Dean Foods reported net income of $37.9 million, or 20 cents per share, up from $23.4 million, or 14 cents per share, in the same period last year.
Dean Foods also reported adjusted net income, excluding one-time items, of 31 cents per share, up from an adjusted 14 cents per share in the prior year period. That was well above the 21 cents per share analysts expected, according to FactSet.
Revenue rose to $3.21 billion from $3.05 billion. Analysts were expecting $3.12 billion, according to FactSet.
Shares of Dean Foods rose $1.15, or 9 percent, to $13.87 in morning trading and touched a 52-week high of $14.09.