Shares in Dean Foods Company (DF) popped over 40% on Wednesday after the $3.2 billion market cap dairy company beat earnings expectations by over 15%- which it had also done in the last three quarterly reports- and announced its plans to spin off part of its WhiteWave business unit, which among its offerings provides more premium product lines such as organic dairy and soy-based dairy substitutes, in an IPO. The company also increased its earnings guidance for the fiscal year. The stock had rallied from $11 to $17 in early July before plunging to about $12 before the quarterly report came in; it closed on August 8th at $17.46.

Dean Foods Company's reported earnings of 36 cents per share was double what the company had earned in the second quarter of FY 2011. Revenue did fall compared to the previous year, but this was primarily due to lower milk prices (which, of course, had the effect of reducing the company's costs and contributing to its earnings boost). The company did finish the quarter with comparatively little cash on hand compared to its debt burden, but part of the strategy behind the WhiteWave IPO is to use the expected proceeds to pay down debt.

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