Dean Foods Co. this week reported posting its strongest quarter in the company’s history as a drop in costs helped double fourth-quarter profits.

Net income for the Dallas-based processor jumped to $66.4 million, or 42 cents a share, in the quarter ended Dec. 31, compared with $32.6 million, or 24 cents a share, a year ago, reported The Dallas Morning News.

The jump was fueled largely by a drop in costs for items such as raw milk, fuel, energy and resin for bottles. The company’s cost for raw milk dropped 23% per hundredweight, and the company cut out 250 delivery routes, reducing diesel fuel costs by 5%. The earnings jump came despite a nearly 5% dip in fourth-quarter sales, to $3.1 billion from $3.2 billion a year ago.

“By many measures, the fourth quarter of 2008 was the strongest in our history,” Gregg Engles, Dean’s chairman and chief executive, told the Morning News. “We’re pleased with the results for the quarter and the full year.”

Operating income for the quarter, adjusted to exclude one-time events, was $190 million, the highest in company history and a gain of 27% over the year-ago period.

The company also posted free cash flow for the year of $462 million, another record.

Engles called 2008 “a year of tremendous progress.”

For 2009, the company predicts earnings of at least 38 cents a share for the first quarter, and $1.50 for the year. The company earned $1.20 a share last year.