Dean Foods Earnings Cheat Sheet: Margins Suffer for Five Quarters Straight

S&P 500 (NYSE:SPY) component Dean Foods Company (NYSE:DF) reported a drop to a loss in the second quarter driven by higher costs. Dean Foods Company is a food and beverage company in the United States offering dairy and frozen food products.

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Dean Foods Company Earnings Cheat Sheet for the Second Quarter

Results: Swung to a loss of $50.5 million (28 cents per diluted share) in the quarter. Dean Foods Company had a net income of $44.8 million or 25 cents per share in the year earlier quarter.

Revenue: Rose 11.6% to $3.3 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: DF reported adjusted net income of 18 cents per share. By that measure, the company beat the mean estimate of 17 cents per share. It beat the average revenue estimate of $3.15 billion.

Quoting Management: “In many ways the second quarter of 2011 is a continuation of the trends we have seen over the last several quarters.” said Gregg Engles, Chairman and CEO. “WhiteWave-Alpro again posted strong results and Fresh Dairy Direct-Morningstar continued to make progress toward profit stability against a backdrop of weak industry volumes. We continued to execute our plan to drive costs out of the business and progress in this area has been solid.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 2.4 percentage points to 23% from the year earlier quarter. Over that time, margins have contracted on average 2.6 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 2.6% to $3.05 billion in the first quarter. The figure rose 5.1% in the fourth quarter of the last fiscal year from the year earlier and climbed 10.1% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 8 cents in the first quarter and by one cent in the fourth quarter of the last fiscal year.

Competitors to Watch: Lifeway Foods, Inc. (NASDAQ:LWAY), Tofutti Brands Inc. (AMEX:TOF), Synutra Intl., Inc. (NASDAQ:SYUT), Smart Balance, Inc. (NASDAQ:SMBL), Mead Johnson Nutrition CO (NYSE:MJN), Wimm-Bill-Dann Foods OJSC (NYSE:WBD), Pepsi (NYSE:PEP), Coca-Cola (NYSE:KO), Kraft (NYSE:KFT), Kellogg (NYSE:F), ConAgra (NYSE:CAG) and The Hain Celestial Group, Inc. (NASDAQ:HAIN).

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(Source: Xignite Financials)

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