Dean Foods reported a loss for the first quarter as an increase in sales was more than offset by lower volume and higher costs.
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Adjusted earnings for the quarter missed analysts' expectations, while revenues beat their estimates. Looking ahead, the company reiterated its earnings outlook for fiscal 2017.
Net loss for the first quarter was $9.76 million or $0.11 per share, compared to net income of $39.20 million or $0.43 per share in the prior-year quarter.
Excluding items, adjusted earnings for the quarter were $0.13 per share, compared to $0.45 per share in the prior year.
Net sales for the quarter rose to $2.00 billion from last year's $1.88 billion. Wall Street expected revenues of $1.97 billion.
Total operating costs and expenses for the quarter increased 7.9 percent from last year to $459.17 million.
Total volume across all products was 633 million gallons for the quarter, a 1.3 percent decline from the year-ago period.
Based on fluid milk sales data published by the USDA through December, fluid milk volume decreased 3.4 percent year-over-year in the quarter on an unadjusted basis. However, when adjusting for the extra selling day in 2016 due to Leap Year, the category decline was 1.8 percent.
On this same basis, Dean Foods' share of U.S. fluid milk volumes increased by 10 basis points year-over-year.
Raw milk costs in the quarter increased roughly 6 percent from the fourth quarter of 2016 and also increased 18 percent from the same period last year.
For fiscal 2017, Dean Foods reaffirmed its outlook for adjusted earnings of $1.35 to $1.55 per share. ■
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