REFILE-UPDATE 3-Dean Foods outlook disappoints, shares fall

(Refiles to eliminate extraneous word "million", paragraph 7)

* EPS ex-items 34 cents; Wall Street view 33 cents

* Net sales fall 13 pct to $2.77 bln, missing estimates

* Sees 2009 EPS $1.63 ex-items; Wall St view $1.66

* Sees dairy prices showing an upward trend next year

* Shares down nearly 9 pct (Recasts; adds forecast details, share move; previous dateline NEW YORK)

CHICAGO, Nov 2 (Reuters) - Top U.S. dairy company Dean Foods Co (DF.N) raised its earnings forecast but disappointed investors who had expected an even biggest boost from lower raw milk prices, sending its shares down nearly 9 percent.

The forecast came even as the company reported higher-than-expected third-quarter profit on Monday, helped by lower costs for fuel, raw milk and packaging.

Dean, which sells dairy products under its own name as well as Horizon organic milk, said raw milk prices started to rise near the end of the third quarter and were continuing to move higher.