I Scream. Don't You?

I'm not too proud to admit it. I'm stumped.

I've just finished reading the earnings report for ice cream maker extraordinaire Dreyer's (NASDAQ:DRYR), maker of the best (read: only palatable) Neapolitan ice cream I've ever had -- Edy's Grand. Aghast, and in hopes of putting Dreyer's numbers in context, I turned to the Fool archives for a bit of research. There I found fellow Fool Rick Munarriz's description of how the company's stock has been on a tear for years.

And I remained stumped.

Let me explain. In its earnings release for fiscal Q2 2005, Dreyer's reported losing $57 million in the first six months of the fiscal year. Compare that with a loss of $43 million in the year-ago period, despite an apparent decline in the cost of raw milk used in the company's products this year (a trend described in the press release for dairy concern Dean Foods (NYSE:DF) last week) and a 6% sales boost over the past year.

Ordinarily, you'd expect a company to post a profits increase when sales rise and raw material costs fall. But that just wasn't the case here. In fact, business looks so terrible at Dreyer's these days that over the past year, the company had to take out an extra $250 million in loans from its corporate sponsor, Nestle.

In short, judging from the numbers, absolutely nothing is going right at Dreyer's these days. And judging from the company's historical financials, nothing has gone right there for quite some time. My favorite site for long, lingering glances into a company's financial history, anumati.com, shows that Dreyer's hasn't posted a profitable year since 2000, or a profitable quarter for the entire span of anumati's quarterly records (back to September 2002).

The free cash flow situation reads similarly: Over the past six years, Dreyer's has racked up $210 million in net cash outflows. And yet . and yet . just look at the charts! One year: up. Two years: really up. Three years? A little jagged, but definitely up.

Color this Fool confused. For all I can tell, Dreyer's is an absolute basket case. A leaky, melting, dripping-lactose-based-goo-all-over-the-living-room-rug basket case. Yet yesterday, 24,145 shares of this company's stock traded on the Nasdaq. Surely someone out there in Fooldom knows why this company is worth buying. If you are he, or she is you, drop me a note. Clue a Fool in. What's so great about Dreyer's (apart from the Neapolitan)?

Fool contributor Rich Smith does not own shares of any company named above.