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Dean Foods Company

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Dean Foods’ shares have underperformed the sector in the last six months, mainly due to its unimpressive earnings history. The company reported a dismal second-quarter 2017, wherein both the top and bottom lines lagged estimates and earnings declined year over year. This marked the company’s third straight quarter of negative earnings surprise. Results were hampered by a tough retail scenario, which has been witnessing fast-evolving trends. Further, volumes remained under pressure due to macro factors and stiff competition. Moreover, management anticipates these obstacles to linger throughout 2017, as is reflected by its curtailed earnings projection for the year. However, Dean Foods remains on track to speed up its commercial and cost productivity efforts, to enhance volumes and mix. The company announced plans to expand cost productivity program, which is likely to aid in achieving additional savings of $40–$50 million annually.

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