What happened

Shares of dairy company Dean Foods Co (NYSE:DF) fell as much as 20.5% in trading Tuesday after reporting second-quarter earnings. At 10:55 a.m. EDT shares were still down 19.3% on the day and showed no signs of recovering.

So what

Revenue was up 4.2% to $1.93 billion in the quarter, but net income fell 47.1% to $17.6 million, or $0.19 per share. Revenue fell slightly below the $1.94 billion analysts were expecting and adjusted earnings of $0.21 per share was below the $0.31 analysts were expecting. It's the bottom-line miss that really sent shares lower on Tuesday.

Milk is being poured into a glass outdoors.

Image source: Getty Images.

Management said competitive and volume pressures are hurting the company and the negative dynamics are expected to continue throughout the year. They also lowered full-year earnings guidance from a range of $1.35 to $1.55 per share to a new range of $0.80 to $0.95 per share.

Now what

There aren't a lot of good trends to point to for Dean Foods. The USDA said that milk sales volumes were down 2.9% in 2017 through the month of May. That's putting pressure on the business and lowering prices as well. Management is eyeing more cost cutting, but with volumes on the decline there isn't a lot to like about Dean Foods' business right now. And the drop in shares may not be the last bad news for investors in this embattled stock.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.