All things dairy company Dean Foods (NYSE:DF) disappointed Wall Street on Wednesday when it released lackluster earnings and guidance. Illustrating the value of even minor shifts in market share, Dean Foods saw milk shipments drop slightly --also a factor of an industrywide drop in milk consumption. Still, the company has had a successful year thus far; it's stock price is up nearly 20%, and it completed the spin-off of its healthy food business, White Wave Foods (NYSE:WWAV). The past couple of years have seen sharp deleveraging, and a management team committed to navigating the treacherous waters of an industry in decline. Here's what you need to know about Dean Foods going forward.

The third quarter proved to be a difficult one for Dean Foods, as both revenue and net income dropped on a year-over-year basis. Top-line sales came in at $2.2 billion -- a 2% drop from the prior year, and the company's third consecutive quarter of zero or negative sales growth. On the bottom line, the company posted a $0.12 per share profit, 14% below 2012's third quarter, and $0.01 below analyst expectations.

As mentioned above, fluid milk volume dropped about 1.7%, while the company's market share of the fluid milk business took a 1.5% hit, to 34.9%.

In contrast to recent years, Dean Foods has a strong-looking balance sheet, with a comfortable amount of debt, and healthy free cash flow fueling the more than $360 million cash horde. With its cash flows, the company introduced a $300 million dividend plan along with a stock buyback aimed at enhancing shareholder value.

Looking ahead, the company lowered guidance for both the final quarter of the year, and the full year 2013. While analysts had been looking for $0.28 per share in quarter four, management is expecting in the neighborhood of $0.17-$0.23. For the full year, the company is looking at $0.85-$0.91 per share -- well under its previously issued guidance of $0.94-$1.01 per share. Analysts wanted $0.98.

The company didn't give investors anything to celebrate other than the continuously improving strength on the balance sheet, healthy free cash flow (nothing to sneer at), and some forward-looking dividend income. Is that enough of a reason to get behind the stock?

Previous thesis
With Dean Foods' deleveraging comes a much-lowered interest expense. Cash flow remains strong, as management has focused intently on cost cutting alongside its debt reduction.

And, though milk consumption is on a downward trend, Dean holds on to some of the strongest brands in the industry. Its TruMoo flavored milks is the biggest flavored milk brand in the nation, and appeals to parents looking for better-ingredient, lower-sugar products for their kids.

The stock's rise over the past 10 months has eliminated some of the value, leaving larger downside risk (evident in the lowered guidance), and reduced upside potential. Still, at under 16 times earnings, and with a newly instated dividend, the company may offer investors a stable long-term income play with the chance of decent capital appreciation. If smart management is a primary criterion for investment selection, a look at Dean Foods is a good practice.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool owns shares of Dean Foods Company and WhiteWave Foods. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.