Dean Foods (DF) Shares Getting Smashed After Weak Q3 Results and Q4 Forecast - Analyst Comments
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Price: $10.34 -1.71%
Rating Summary:
8 Buy, 5 Hold, 0 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 12 | Down: 19 | New: 21
Rating Summary:
8 Buy, 5 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 19 | New: 21
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Shares of Dean Foods Co. (NYSE: DF) are down more than 17 percent in midday market movement on Tuesday after the nation's largest milk producer reported that its third-quarter net income fell by more than half and it forecast fourth-quarter income below the Street's expectations.
The company reported third-quarter earnings of 13 cents per share, 8 cents below the analyst estimate of 21 cents per share.
Revenue for the company posted revenue of $3.05 billion, compared to the Street's view of $3.04 billion.
Dean Foods said that the weak performance in the third quarter was attributable to weak pricing and higher costs.
“These results are clearly disappointing for us and reflect continued significant challenges in our largest business, Fresh Dairy Direct-Morningstar,” said Gregg Engles, Chairman and Chief Executive Officer. “Despite our poor consolidated performance, WhiteWave-Alpro continued to perform exceptionally well and delivered significant top and bottom line growth."
Looking forward, the company sees Q4 EPS of 13c - 18c, below the consensus of 27c.
Shares of Dean Foods are down 17.76 percent to $8.52 in midday market trade on Tuesday.
Analyst Comments
Goldman Sachs analyst says, "Dean’s Fresh Dairy business margin continues to be weaker than expected with operating margins down 300bp in 3Q versus our expectations of down 250bp. The continued pressure of aggressive retail pricing for private label milk and a very competitive industry backdrop drove notable trade down pressure to low margin private label products."
Wells Fargo maintains an Outperform rating on Dean Foods, while lowering its valuation range from $12 - $13 to a range of $10 -$11.
Wells Fargo analyst says, "Fresh Dairy Direct segment results remain under pressure from retailers using deeply-discounted private label milk as a loss leader and extracting price concessions from dairy processors. This pressure has been compounded by the decline in volumes and resulting deleveraging from weak consumer demand and difficult comparisons with the year-ago period when retailers were beginning this promotional strategy."
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The company reported third-quarter earnings of 13 cents per share, 8 cents below the analyst estimate of 21 cents per share.
Revenue for the company posted revenue of $3.05 billion, compared to the Street's view of $3.04 billion.
Dean Foods said that the weak performance in the third quarter was attributable to weak pricing and higher costs.
“These results are clearly disappointing for us and reflect continued significant challenges in our largest business, Fresh Dairy Direct-Morningstar,” said Gregg Engles, Chairman and Chief Executive Officer. “Despite our poor consolidated performance, WhiteWave-Alpro continued to perform exceptionally well and delivered significant top and bottom line growth."
Looking forward, the company sees Q4 EPS of 13c - 18c, below the consensus of 27c.
Shares of Dean Foods are down 17.76 percent to $8.52 in midday market trade on Tuesday.
Analyst Comments
Goldman Sachs analyst says, "Dean’s Fresh Dairy business margin continues to be weaker than expected with operating margins down 300bp in 3Q versus our expectations of down 250bp. The continued pressure of aggressive retail pricing for private label milk and a very competitive industry backdrop drove notable trade down pressure to low margin private label products."
Wells Fargo maintains an Outperform rating on Dean Foods, while lowering its valuation range from $12 - $13 to a range of $10 -$11.
Wells Fargo analyst says, "Fresh Dairy Direct segment results remain under pressure from retailers using deeply-discounted private label milk as a loss leader and extracting price concessions from dairy processors. This pressure has been compounded by the decline in volumes and resulting deleveraging from weak consumer demand and difficult comparisons with the year-ago period when retailers were beginning this promotional strategy."
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