We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dean Foods (DF) Reports Q1 Loss, Weak Milk Volumes Hurt
Read MoreHide Full Article
Dean Foods Company reported disappointing first-quarter 2019 results. The company incurred loss, which is wider than the Zacks Consensus Estimate. Moreover, the top and the bottom line deteriorated year over year mainly due to volatility surrounding fluid milk volumes. Let’s discuss.
Q1 in Detail
Adjusted loss from continuing operations amounted to 41 cents per share, wider than the Zacks Consensus Estimate of a loss of 22 cents. Also, the bottom line compares unfavorably with the year-ago quarter’s earnings of 14 cents.
Persistent decline in fluid milk consumption and high raw milk costs were the main deterrents. In fact, raw milk costs rose 8% year over year but declined 1% on a sequential basis.
Net sales declined nearly 9.3% to $ 1,795.4 million and missed the Zacks Consensus Estimate of $1,896 million. Volumes in the quarter continued to decline year over year, due to customer exits and category declines. Per the USDA results, fluid milk category dropped 1.2% through February on a quarter-to-date basis.
Adjusted gross profit declined almost 17% to $374 million due to lower raw milk volumes. Adjusted gross margin contracted almost 180 basis points to roughly 20.8%.
Further, adjusted operating loss was $36 million in the quarter, against adjusted operating income of $32 million in the year-ago quarter.
Financial Position
Dean Foods ended the quarter with cash and cash equivalents of $22.5 million, long-term debt (including current portion) of approximately $1,009.6 million and shareholders’ equity of $256.1 million. Total debt outstanding (net of cash in hand) was nearly $991 million as of Mar 31, 2019.
In the first quarter, the company used nearly $72 million of net cash for operating activities. Capital expenditures in the quarter amounted to nearly $27 million.
Other Developments
Management stated that the company is on track with growth efforts such as right-sizing the cost structure, innovations and integrating operations. To induce greater financial agility, the Zacks Rank #3 (Hold) company is focusing on an enterprise-wide cost productivity plan that entails optimizing supply chain operations and spending. It is progressing with brand-building initiatives as well as bolstering logistics and distribution capabilities. Moreover, as stated earlier, the company is on track with exploring strategic alternatives for its business.
Price Performance
The company’s shares plunged 60.2% in the past three months compared with the industry’s slump of 56.6%.
McCormick & Company (MKC - Free Report) , with long-term earnings growth rate of 9%, carries a Zacks Rank #2 (Buy).
General Mills (GIS - Free Report) , with a Zacks Rank #2, has long-term earnings growth rate of 7.5%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
Image: Bigstock
Dean Foods (DF) Reports Q1 Loss, Weak Milk Volumes Hurt
Dean Foods Company reported disappointing first-quarter 2019 results. The company incurred loss, which is wider than the Zacks Consensus Estimate. Moreover, the top and the bottom line deteriorated year over year mainly due to volatility surrounding fluid milk volumes. Let’s discuss.
Q1 in Detail
Adjusted loss from continuing operations amounted to 41 cents per share, wider than the Zacks Consensus Estimate of a loss of 22 cents. Also, the bottom line compares unfavorably with the year-ago quarter’s earnings of 14 cents.
Persistent decline in fluid milk consumption and high raw milk costs were the main deterrents. In fact, raw milk costs rose 8% year over year but declined 1% on a sequential basis.
Net sales declined nearly 9.3% to $ 1,795.4 million and missed the Zacks Consensus Estimate of $1,896 million. Volumes in the quarter continued to decline year over year, due to customer exits and category declines. Per the USDA results, fluid milk category dropped 1.2% through February on a quarter-to-date basis.
Adjusted gross profit declined almost 17% to $374 million due to lower raw milk volumes. Adjusted gross margin contracted almost 180 basis points to roughly 20.8%.
Further, adjusted operating loss was $36 million in the quarter, against adjusted operating income of $32 million in the year-ago quarter.
Financial Position
Dean Foods ended the quarter with cash and cash equivalents of $22.5 million, long-term debt (including current portion) of approximately $1,009.6 million and shareholders’ equity of $256.1 million. Total debt outstanding (net of cash in hand) was nearly $991 million as of Mar 31, 2019.
In the first quarter, the company used nearly $72 million of net cash for operating activities. Capital expenditures in the quarter amounted to nearly $27 million.
Other Developments
Management stated that the company is on track with growth efforts such as right-sizing the cost structure, innovations and integrating operations. To induce greater financial agility, the Zacks Rank #3 (Hold) company is focusing on an enterprise-wide cost productivity plan that entails optimizing supply chain operations and spending. It is progressing with brand-building initiatives as well as bolstering logistics and distribution capabilities. Moreover, as stated earlier, the company is on track with exploring strategic alternatives for its business.
Price Performance
The company’s shares plunged 60.2% in the past three months compared with the industry’s slump of 56.6%.
Looking For Consumer Staples Stocks? Check These
The Estee Lauder Companies (EL - Free Report) , with long-term earnings growth rate of 12.7%, carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..
McCormick & Company (MKC - Free Report) , with long-term earnings growth rate of 9%, carries a Zacks Rank #2 (Buy).
General Mills (GIS - Free Report) , with a Zacks Rank #2, has long-term earnings growth rate of 7.5%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>