Lower milk costs help Dean Foods beat estimates

Shares in Dean Foods rallied, after the largest milk processor in the US reported first-quarter adjusted earnings and second-quarter outlook that topped estimates.

The Dallas, Texas-based company said it expected second-quarter adjusted earnings in the range of 20-30 cents a share, ahead of forecasts for 18 cents a share.

Dean Foods reported a loss of $74m or 78 cents a share in the three months to the end of March, compared with a loss of $8.9m or 9 cents a share in the same period the year before. Adjusting for one-time items, such as charges tied to the launch of its national DairyPure milk brand, Dean Foods reported earnings of 24 cents a share, ahead of analysts' forecasts for 17 cents a share.

Sales declined 12 per cent from the previous year to $2.05bn, shy of forecasts of $2.1bn.

The company said its results were boosted by a decline in the price of raw milk.

"Dean Foods' first-quarter results reflect solid execution within an easing commodity environment," Chris Bellairs, chief financial officer, said.

Shares in Dean Foods, which have gained 17 per cent in the past year, advanced 6.45 per cent to $17.33.

Wayfair, a retailer betting there is online growth in the high-end of the furniture market, stood out on Monday after delivering higher first-quarter revenues than Wall Street expected.

Wayfair swept on to the US stock market in October as investors bought into the promise that the online market for furniture and home furnishings is ripe for expansion.

Its results for the first three months of the year offered some vindication, with revenues climbing just over 50 per cent to $424.4m. That topped a forecast of $388.5m. The company reported a narrower than expected loss of $27m or 33 cents a share.

The company said repeat customers placed nearly 54 per cent of total orders, compared with 51 per cent in the same period a year ago. Wayfair shares climbed as much as 12.7 per cent to $32.96, but ended the day down 2.5 per cent at $30.01.

MannKind Corporation fell 4.72 per cent to $3.63, after analysts at JPMorgan downgraded the stock from "neutral" to "underweight" and withdrew their $6 price target. Analysts said the launch of the biopharmaceutical company's inhaled insulin, Afrezza, had been slow.

"Following the slow uptake of Afrezza seen so far, we expect the launch to continue to be sluggish and now estimate peak sales five years post launch (2019) of approximately $500m, which we believe will still require significant progress to clear current hurdles," Cory Kasimov, an analyst at JPMorgan, said.

Noble Energy fell 6.21 per cent to $46.07, after the US oil and gas group said it would buy Rosetta Resources for $2.1bn in stock and assume $1.8bn of its debt. Shares in Rosetta Resources advanced 27.19 per cent to $24.58.

The S&P 500 declined 0.51 per cent to 2,105.33, with the Dow Jones Industrial Average down 0.47 per cent at 18,105.17. The Nasdaq Composite was 0.20 per cent lower at 4,993.57.

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