The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Dean Foods missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share increased.
Margins grew across the board.
Dean Foods chalked up revenue of $3.14 billion. The nine analysts polled by S&P Capital IQ wanted to see a top line of $3.26 billion on the same basis. GAAP reported sales were 7.8% lower than the prior-year quarter's $3.41 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 $0.33. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.28 per share. GAAP EPS were $0.20 for Q3 versus -$8.39 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 24.9%, 320 basis points better than the prior-year quarter. Operating margin was 6.0%, 330 basis points better than the prior-year quarter. Net margin was 1.2%, 4,640 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $3.38 billion. On the bottom line, the average EPS estimate is $0.27.
Next year's average estimate for revenue is $12.95 billion. The average EPS estimate is $1.21.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 449 members out of 497 rating the stock outperform, and 48 members rating it underperform. Among 120 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 105 give Dean Foods a green thumbs-up, and 15 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 $18.56.
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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 Company. 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.