Dean Foods Up on Earnings and WhiteWave IPO

Dean Foods Company

, the United States largest milk processor, shares traded up on Wednesday after reporting second-quarter results on Tuesday. On the same day, the company announced that one of subsidiaries registered for an initial public offering. Dean Foods operates a food and beverage company that primarily focuses on dairy products. Dean Foods reported strong second-quarter earnings despite a surge in the price of milk in July. The company posted a net income of $56 million, compared to last year's second quarter net loss of $51 million. The second-quarter of 2011 included a $131 charge from the class action litigation with Tennessee dairy farmers. Net sales decreased from $3.3 billion to $3.1 billion due to lower dairy commodity costs. Gregg Engles, Chairman and CEO, commented, "We continued to build on our momentum in the second quarter, delivering strong growth across all of our operating segments. In addition to each of our businesses executing well against their stated plans, we also continued to benefit from disciplined expense control across the organization." The company also announced that its subsidiary, The WhiteWave Foods Company, filed for an IPO of its class A common stock with the US Security and Exchange Commission. After the IPO, Dean Foods will own at least 80% of the common stock, and will distribute its remaining interest of WhiteWave to shareholders. The IPO could be worth $300 million. The WhiteWave Foods Company manufactures, develops, markets, and sells a variety of dairy products and is accounted for 40% of Deans profit. Prior to reporting earnings on Tuesday, Dean Foods had been down about 26% since July 1. Throughout July, there were extreme weather conditions that hurt farmers. The US Department of Agriculture reduced its production estimates for milk and raised its price forecast. Dean Foods saw its biggest drop in eight months after the announcement. The higher milk prices created higher costs for milk producers. Looking ahead, the company expects its segments to continue to grow in the third-quarter. Based on the company's strong first half performance in 2012, Dean Foods increased its full year earnings per share outlook to a range of $1.18 to $1.28. Dean Foods Company traded up about 36% on Wednesday.