Dean Foods Co. (DF) first-quarter 2012 earnings of $0.31 per share came ahead of the Zacks Consensus Estimate of $0.21 and jumped over two-fold from the prior-year period, primarily driven by a recovery in its fluid milk business with continuous growth at its WhiteWave-Alpro business. The company's net sales grew 5.4% due to better pricing strategy coupled with robust segmental performance.
The company now forecasts full-year 2012 adjusted earnings in the range of $1.10 to $1.20 a share, up from $0.87-$0.95 forecasted earlier. The company has taken initiatives to restructure operations in an effort to reduce costs while expanding its branded product business through acquisitions.
Moreover, in a move to optimize its capital allocation and concentrate on core business activities, Dean Foods intends to divest underperforming businesses. Currently, we are maintaining a long-term Outperform recommendation on the stock.
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