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What: Shares of Diamond Foods, Inc. (NASDAQ:DMND) were getting discarded today, falling by as much as 13% after a disappointing earnings report.
So what: The snack food maker missed estimates on both top and bottom lines as sales increased 3.2% to $190.9 million, short of the consensus at $191.7 million. Adjusted earnings, meanwhile, came in at $0.11, missing estimates of $0.17. Despite the underwhelming numbers, CEO Brian Driscoll noted improvements in sales and gross margin and said performance in the Snacks segment was strong as sales were up 9%.
Now what: Two years after an accounting scandal forced financial restatements and shredded the stock price, Diamond Foods is still on the recovery path. Year to date, revenue is down, so growth in the quarter past marks some improvement, and management said adjusted EBITDA would increase for the full year in spite of higher tree nut costs. Still, the stock is priced for the company to return to full health, but considering Diamond's current struggles, investors may have to wait a few more quarters before the company is making meaningful profits. I'd expect the stock to remain pressured until then.
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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.