Dean Foods Co., the largest U.S. milk processor, forecast first-quarter earnings that exceeded analysts’ estimates after a slump in the cost of the commodity boosted margins.
Profit excluding one-time items will be 32 cents to 42 cents a share, the Dallas-based company said in a statement Monday. The midpoint of that range is higher than the 33-cent average of nine estimates compiled by Bloomberg. Dean also reported fourth-quarter income of 36 cents a share, compared with the 34-cent average estimate.
Dean buys raw milk from farmers, pasteurizes and processes it, and then sells it on to retail stores, restaurants and food- service vendors. The price U.S. farmers received for milk dropped in 2015 and will decline again this year as production climbs, the Department of Agriculture said in a report Feb. 9. In the first quarter, the average price for Class I Mover, a raw-milk benchmark, will drop about 14 percent from a year earlier, Dean said.
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