Dean Foods (NYSE:DF) shares soared more than 36% in Wednesday trading as it posted better-than-expected quarterly earnings and its soy milk unit prepared for an initial public offering.
The company posted second-quarter earnings of $56.2 million, reversing a $50.5 million loss during the same time last year. Revenue dipped to $3.13 billion, down from $3.30 in 2011, and falling short of Wall Street, which was looking for $3.22 billion, the Associated Press noted.
Adjusted EPS for the quarter was 36 cents, topping analysts’ estimated earnings of 30 cents a share.
According to documents filed with the SEC, Dean will spin off WhiteWave, the producer of Silk brand almond milk. WhiteWave posted earnings of $90.8 million last year, up 29% over the prior year on sales of $1.92 billion.
The regulatory filings indicated that current Dean Foods CEO Gregg Engles will head the company after the spin-off. He’ll be succeeded as Dean Foods CEO by Gregg Turner, the company’s chief supply chain officer and president of its Fresh Dairy Direct unit.
Dean Foods indicated that it will retain 80% of outstanding WhiteWater common shares after the offering, but did not reveal how many shares will be offered or their opening price. WhiteWave will be listed on the NYSE under the ticker symbol WWAV.
The company said the gain from WhiteWave’s IPO will be used to lower debt. Dean has been hurt by increased feed costs resulting from this summer’s drought in the U.S. and from declining milk sales.