This article is part of our Rising Star portfolio series.

When I picked dairy company Dean Foods (NYSE: DF) for my Messed-Up Expectations portfolio in December, the market was expecting very little in the way of performance for this milk producer.

And that was reflected in the first-quarter expectations of analysts. As a group, they expected just $0.06 in earnings per share from $3.07 billion in revenue. That would amount to a 74% drop in earnings versus last year. This morning, Dean Foods surprised everyone with its report of $0.14 in EPS on $3.05 billion in sales.

The company is still struggling, seeing lower volumes on milk sold with higher input costs contributing to lower margins. Grocers including Kroger (NYSE: KR) and Safeway (NYSE: SWY) have continued to hold their in-house milk brand prices at a deep discount to help drive their own sales. Dean Foods is, however, continuing to cut costs and to expand its own customer base.

On the good news side, its organic milk and soymilk divisions saw increased sales and operating income as consumers continue to demand more of these specialty milks. Sales increased 7% and operating income grew 8.9%. Plus, the company is off to a good enough start to the year that management raised both the second-quarter and full-year outlooks. That's really got the market psyched.

When I first called out Dean Foods, the expectations for free cash flow growth were actually declines of 3.9% annually for five years, 1.9% for the next five years, and then 0% after that (using my usual 15% hurdle rate to discount). At a price of $12.32 as I write, some 47% higher than when I bought, the market is now expecting 8.3% annual growth in FCF for five years, 4.2% for the next five, and 2.5% after that. Quite a turnaround!

That's still below its five-year average of growing FCF by 13.5% per year, so I'm not looking to sell at the moment. However, if the expectations get too robust, for instance 30% for five years, 15% for five more, and 2.5% from then on, then they would be just as messed up as they were before and I'd sell. But that probably won't happen for a while yet. In the meantime, I'll enjoy the returns.

After you add Dean Foods to My Watchlist, come discuss the company's results on my MUE discussion board or follow me on Twitter.