The 10-second takeaway
For the quarter ended March 31 (Q1), Dean Foods beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew significantly.
Gross margins dropped, operating margins improved, and net margins grew.
Dean Foods logged revenue of $3.21 billion. The 12 analysts polled by S&P Capital IQ foresaw a top line of $3.13 billion on the same basis. GAAP reported sales were 5.4% higher than the prior-year quarter's $3.05 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.31. The 12 earnings estimates compiled by S&P Capital IQ averaged $0.21 per share. GAAP EPS of $0.20 for Q1 were 43% higher than the prior-year quarter's $0.14 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 24.5%, 10 basis points worse than the prior-year quarter. Operating margin was 4.7%, 150 basis points better than the prior-year quarter. Net margin was 1.2%, 40 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $3.22 billion. On the bottom line, the average EPS estimate is $0.28.
Next year's average estimate for revenue is $12.97 billion. The average EPS estimate is $1.08.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 436 members rating the stock outperform and 49 members rating it underperform. Among 107 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 91 give Dean Foods a green thumbs-up, and 16 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dean Foods is outperform, with an average price target of $13.65.
Over the decades, small-cap stocks like Dean Foods have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Dean Foods to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Dean 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.