I buy plenty of food produced, packaged, or otherwise provided by Dean Foods
But I have to admit, I am a big fan of Dean's ice cream, so it makes sense to take a cue from Peter Lynch and see if the stock is as tasty as the Cherry Crocodile. Let's put it this way: I'll pay the premium for the ice cream, but the stock is staying on the shelf.
Recent first-quarter numbers were less than stellar. Earnings came out flat, at $0.43 per share, the same tally as the prior-year quarter. If you back out onetime plant-closing costs -- as management would love you to do -- there's a happier-looking $0.45 per stub, a 7% increase in the shareholders' bottom line.
Revenues were up 14%, though it's tough to know exactly how much of that is an organic sales uptick, and how much is due to recent acquisitions. Dean didn't do us the favor of adjusting those numbers.
Rising commodity prices took the whipping for the quarter's sins. A similar, but much larger sibling, Kraft
Despite our government's calls for us to "pay no attention to that man behind the curtain," the dreaded I-word is leaking into financial reports. Inflation is coming home to roost, and it looks like it will continue to put the pinch on Dean. Ballooning milk prices forced the firm to drop its full-year earnings guidance below the Street's estimates. Worse yet, an uptick in lending rates would make the whole growth-through-acquisition thing a much more dangerous game. That's not the kind of threat I want hanging over stocks in my portfolio.
Souphound? Talk edibles on the Fool's Food & Drink discussion boards.