Dean Foods Co (NYSE:DF) Plans to Close Milk Factories

Denver, CO, 08/09/2013 (Avauncer.com) – Dean Foods Co (NYSE:DF) closed in the previous trading session at $10.20 after going down by $0.82 (or -7.44%). With about 186.52 million outstanding shares, the market capitalization of the company is $1.90 billion.

Dean Foods Co, the top dairy company of United States said yesterday that it would close up 15% of its factories because of the falling volumes and the increasing competition. The company reported quarterly loss and said that there is possibility of more tough times in the future. After it said that the present quarter would be the most challenging quarter of this year, the shares of Dean which is based on Dallas and is known for Dean’s milk and its Meadow Gold fell as much as 9%.

The company said that it is planning to close 8 to 12 of its factories to cut costs, as the volumes of milk fall, in the mid next year. The Chief Executive Officer of the company, Gregg Tanner said on a conference call that the company has accelerated the severance which also includes their plans to close 10 to 15% of their plants. He said that he expects these efforts to reduce deleverage of the volume.

The company said in February that the loss of a significant customer will lead to a low, single digit percent decline in the milk volumes of 2013. Dean reported a net loss of 30 cents per share or $56.9 million on the basis of attributes for the quarter that ended in June while in the previous year, a profit of 30 cents per share or $56.2 million was made by the company.

On an adjusted basis, the company earned 13 cents per share. On an average, analysts were expecting a profit of 14 cents per share as the revenue was 2.25 billion. Its milk sales volume declined to 36.4% during 2Q.