Dean Foods, From Earnings To Spilled Milk (DF)

The stock market may be challenging 2-year highs, but not Dean Foods Company (NYSE: DF).  Dean Foods is hitting 52-week lows if the pre-market activity remains at current levels.  The company reported that profits were cut in half and it also announced that CFO Jack Callahan will resign his post. Dean Foods missed earnings by a wide margin at $0.13 EPS as revenues rose 10.5% year over year to $3.05 billion; Thomson Reuters had estimates of $0.21 EPS and $3.04 billion in revenues.

Unfortunately, Dean Foods also released downward guidance for the coming quarter.  It now sees $0.13 to $0.18 EPS versus a $0.27 Thomson Reuters consensus.

The company noted that its Fresh Dairy Direct-Morningstar business will remain challenged as the retail environment continues to be very competitive and volumes across much of the portfolio are soft.  The company sees that pressure continuing in the fourth quarter and at least through the first half of next year.

Another issue is that price concessions already given will continue to pressure comparisons year over year regardless of whereprices go.

Dean Foods closed at $10.36 Monday and the prior 52-week trading range is $9.38 to $18.79; the pre-market levels right before the open have shares down around $8.75 on nearly 1 million shares.  It looks like Dean Foods will be hitting fresh lows during a strong stock market.

JON C. OGG