Dean Foods (NYSE:DF) made a big splash on Wednesday by revealing a 50% surge in first-quarter profits and upgrading its full-year earnings outlook, bullish developments that sent its shares soaring more than 10%.
The maker of dairy and other food products said it earned $37.9 million, or 20 cents a share, last quarter, compared with a profit of $25.3 million, or 14 cents a share, a year earlier. Excluding one-time items, it earned 31 cents a share, well ahead of consensus calls for 21 cents.
The parent of Horizon Organic dairy brands and Silk soy milk said revenue increased 5.4% to $3.21 billion, topping the Street’s view of $3.13 billion. Gross margins ebbed to 24.5% from 24.6%.
“Today we announced strong first quarter results, driven by stronger than forecasted growth across each of our three operating segments, and supported by tight expense control across the business,” CEO Gregg Engles said in a statement.
Looking ahead, Dean Foods projected second-quarter non-GAAP EPS of 28 cents to 33 cents, which compares favorably with estimates from analysts for 22 cents.
For the full year, Dean now sees non-GAAP EPS of $1.10 to $1.20, well ahead of its earlier view for 87 cents to 95 cents and easily topping the Street’s view of 95 cents.
“Given our significant momentum in the first quarter, the cautious optimism that we expressed last quarter has turned less cautious," said Engles. "We expect strong full year growth across the business.”
Wall Street cheered the upbeat news, bidding shares of Dean Foods 9.36% higher to $13.91. The gains should allow the stock to extend its 2012 rally of 13.6%.