Dean Foods reported a profit for the fourth quarter 2017 that increased about 59 percent from last year.
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he company expects the first quarter earnings to be disproportionately lower than the fourth quarter of 2017, and it expects to see an increase in adjusted earnings per share as it moves through the year and into 2019.
It announced plans for executing an enterprise-wide cost productivity program to secure incremental savings in 2018 and beyond.
The company projects full year 2018 adjusted earnings per share to be in the range of $0.55 to $0.80. Analysts expect annual earnings of $0.87 per share.
Net income for the fourth-quarter of 2017 rose about 59 percent to $52.32 million from the prior year's $32.83 million, with earnings per share improving to $0.57 from $0.36 in the previous year.
Adjusted income from continuing operations for the fourth-quarter were $22.69 million, or $0.25 per share, compared to $34.21 million, or $0.38 per share in the previous year.
Net sales for the quarter declined to $1.93 billion from $2.02 billion in the prior year. Wall Street expected revenues of $1.96 billion.
The company announced plans for executing an enterprise-wide cost productivity program to secure incremental savings in 2018 and beyond. It is rescaling the supply chain involves consolidating and right-sizing its manufacturing capacity to better match volume as well as adjust for expected changes in 2018.
The company is taking a holistic approach to its supply chain network, evaluating opportunities across the country in both operations and logistics.
The company plans to consolidate its plant network while maintaining quality, value and service and expects to implement the changes in phases beginning in 2018 and with targeted completion in 2019.
It is optimizing spend management utilizing coordinated procurement efforts across the entire enterprise in all key categories.
The company plans to better leverage its size and scale for efficiencies across all facets of spend in addition to expanding its cost control efforts across all product and indirect spend categories.
The company plans to implement a flatter, leaner and more agile organizational structure to enhance decision making and help build functional competencies that will increase effectiveness with customers and suppliers.
The company completed the first phase of this general and administrative focused reduction in the fourth quarter of 2017 and first quarter of 2018 with further actions planned over the coming months.
The company noted that the accumulation of the new efforts, coupled with the ongoing work of the company's base cost productivity initiatives, will generate savings in 2018 that the company expects will begin to mitigate some of the anticipated impact from volume deleverage and non-dairy input cost inflation.
A portion of these savings are expected to impact 2018 with further and larger savings in 2019 and beyond. ■