The biggest milk processor in the U.S., Dean Foods, set its goal for the first quarterly adjusted profit because of the significant drop in butterfat prices.
Dean Foods beat the average estimate of analysts for the first time in seven quarters now and reported a smaller-than-expected adjusted loss for the third quarter which just ended on the 30th of September.
The Meadow Gold and Dean’s Milk maker said that it already anticipated lesser production and distribution costs because of the closures of its 12 plants plus the cost-cutting measures that it has underwent for the past three months.
As Dean Foods Chief Executive Gregg Tanner mentioned in his statement on Monday, the company is not expecting much relief on the costs of raw milk until the first quarter of 2015 but is hoping for significant declines in the cost of butterfat at the end of the last quarter of the year.
The company’s narrow profit is also blamed by Dean Foods on the unstable milk prices and the expensive cost of butterfat which is the main ingredient of its highly in-demand products like cottage cheese and ice cream.
Dean Foods’ net sales went up by 8% or 2.37 billion U.S. dollars which is a little bit better than the estimate of analysts.
Last Monday, the company’s shares increased at $16.44 which is 14% higher on the New York Stock Exchange.