Dean Foods Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of dairy company Dean Foods (NYSE: DF  ) surged today, gaining as much as 16% in intraday trading after the company reported first-quarter results.

So what: Revenue for the quarter rose slightly from last year to $3.1 billion, while adjusted earnings per share fell 39% to $0.14. The EPS tally did, however, handily beat Wall Street estimates, which anticipated $0.06 on the bottom line. The company saw continued strong performance out of its WhiteWave-Alpro segment, which sells Horizon Organic milk and Silk soy products. Its Fresh Dairy Direct-Morningstar segment -- which constitutes most of the company's sales -- was another story as milk volumes fell more than the broader industry.

Now what: Despite the struggles at Fresh Dairy Direct-Morningstar, Dean put a rosy outlook -- at least as compared to Wall Street estimates -- on the second quarter and the rest of the year. At the midpoint of its ranges, management sees second quarter and full-year earnings per share of $0.18 and $0.71, respectively. Besides trying to put its struggling segment back on track, the company plans to increase its efforts to reduce costs, even as it wrangles with rising commodity prices.

Want to keep up to date on Dean Foods? Add it to your watchlist.

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