Dean Foods Earnings Cheat Sheet: Off to Strong 2011 and Cautiously Optimistic

S&P 500 (NYSE:SPY) component Dean Foods Company (NYSE:DF) posted lower net income in the first quarter compared with a year-earlier period. 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 First Quarter

Results: Net income for the dairy products company company fell to $25.3 million (14 cents/share) vs. $43.2 million (24 cents/share) a year earlier. A decline of 41.5% from the year earlier quarter.

Revenue: Rose 2.6% to $3.05 billion YoY.

Actual vs. Wall St. Expectations: DF beat the mean analyst estimate of 6 cents/share. Estimates ranged from 5 cents per share to 7 cents per share.

Quoting Management: “Overall, the business is off to a stronger start than we had anticipated and we are somewhat encouraged as we look to the balance of the year,” said Gregg Engles, Chairman and CEO. “While we have a long way to go at Fresh Dairy Direct-Morningstar, I am cautiously optimistic that the trajectory of our business is upward and that we are on a path for continued strong progress as we move through the balance of the year. In our other major segment, WhiteWave-Alpro continued to perform well, with both strong top and bottom-line growth against a tough overlap and unfavorable holiday calendar.”

Key Stats: Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 0.7 percentage point to 24.6% from the year earlier quarter. Over that time, margins have contracted on average 2.7 percentage points per quarter on a year-over-year basis.

Over the last five quarters, revenue has increased 7.6% on average year over year. The biggest increase came in the second quarter of the last fiscal year, when revenue rose 10.2% from the year earlier quarter.

Competitors to Watch: YoCream International, Inc (YOCM), Lifeway Foods, Inc. (NASDAQ:LWAY), Tofutti Brands Inc. (AMEX:TOF), Synutra Intl., Inc. (NASDAQ:SYUT), Groupe Danone SA (DANOY), Smart Balance, Inc. (NASDAQ:SMBL), Mead Johnson Nutrition CO (NYSE:MJN), Wimm-Bill-Dann Foods OJSC (NYSE:WBD), ConAgra (NYSE:CAG), SYSCO (NYSE:SYY), Tyson Foods (NYSE:TSN), and The Hain Celestial Group, Inc. (NASDAQ:HAIN)

Stock Performance: Shares of DF are up 9.93% to $12.07 per share from the previous close of $10.98.

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