Yahoo Finance Weak Volumes Likely to Hurt Dean Foods (DF) in Q2 Earnings
Dean Foods Company DF is slated to release second-quarter 2019 results on Aug 6. This manufacturer of dairy and other specialty food products reported a loss in the trailing three quarters, wherein it also missed the Zacks Consensus Estimate in all of them.
Let’s take a look at how things are placed ahead of the upcoming quarterly results.
Soft Volumes & High Input Costs are Worries
Dean Foods has been grappling with loss of share in U.S. fluid milk volumes for a while. Lower volumes are also being triggered by customer exits and other categorical weaknesses, which were witnessed in the first quarter. Persistence of sluggish volumes may hurt the company’s performance in the to-be-reported quarter.
In addition to soft volumes, high input costs have exerted pressure on the company’s profits. In this context, high costs for raw milk is a prime deterrent. Management expects Class I raw milk costs to rise nearly 12% in the second quarter. Also, the company anticipates dairy commodity inflation to persist throughout 2019.
Moreover, transitory costs associated with plant consolidation is raising the company’s cost burden. Such continued pressures are likely to dent gross margin in the upcoming quarterly results.
Although the company is committed toward productivity initiatives and cost reductions, they are yet to yield favorably and turn around performance. That said, we expect headwinds stemming from weak volumes and high costs to persist and dent results in the second quarter.
Dean Foods Company Price, Consensus and EPS Surprise
Dean Foods Company price-consensus-eps-surprise-chart | Dean Foods Company Quote
Estimates Unveils a Gloomy Picture
The Zacks Consensus Estimate is pegged at a loss of 9 cents per share for the quarter to be reported. The projection, which has widened by 3 cents in the past 30 days, compares unfavorably with earnings of 16 cents reported in the prior quarter.
Further, the consensus mark for revenues is pegged at $1,887 million, which suggests a drop of almost 3.2% from $1,951 million generated in the year-ago quarter.
Dean Foods currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat Earnings Estimates
Here are a few companies you may want to consider as our model shows that they have the right combination of elements to beat earnings.
Estee Lauder EL has an Earnings ESP of +2.46% and a Zacks Rank #2.
Kimberly-Clark KMB has an Earnings ESP of +0.43% and a Zacks Rank #2.
Energizer Holdings ENR has an Earnings ESP of +1.79% and a Zacks Rank #3.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Energizer Holdings, Inc. (ENR) : Free Stock Analysis Report
Kimberly-Clark Corporation (KMB) : Free Stock Analysis Report
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
Dean Foods Company (DF) : Free Stock Analysis Report
To read this article on Zacks.com click here.
