Dean Foods Profit Down 48% on Increased Costs

Dean Foods Co., the dairy products maker that agreed to be bought by Suiza Foods Corp., said operating profit dropped 48% in its fiscal fourth quarter to $15.5 million, or 43 cents a share. Sales rose 13% to $1.16 billion.

Increased costs for marketing powdered-milk products and new refrigerated items such as Dips for One vegetable dips, and higher pickle-making costs, led the company last week to cut its earnings forecast to 40 to 43 cents a share. In response, analysts cut their average forecast to 44 cents from 64 cents, according to First Call/Thomson Financial.

Suiza, the biggest U.S. dairy products maker, still plans to pursue the purchase of its smaller rival, which would create a company with about 35% of the U.S. milk market.

Shares of Franklin Park, Ill.-based Dean Foods rose 21 cents to $39.56 on the NYSE.