Diamond Earnings

CORRECT: Diamond Foods representative confirms that there is no set date to report earnings. The company representative states that it cannot release earnings until the audit committee is complete with its investigation. Food producer Diamond Foods DMND is expected to report earnings of 94 cents per share, according to Wall Street analysts who are expecting higher sales to drive the company's bottom line, despite a recent shareholder suit against the company's directors, alleging that the company misled investors regarding payments to walnut growers in 2011. The resulting scandal moved Deutsche Bank to suspend its price target on the snack company until an auditing review gave its decision on the directors' actions. It has also made the stock price plummet from a record high of $96.13 in late September to less than $37 on Tuesday, despite the growing popularity and market presence of its Kettle Brand potato chips and Pop Secret popcorn. However, the cut in price has also made produced a more appealing P/E ratio, currently at 16.61. There is much potential in Diamond Foods, but also much risk. The company's strong growth meant that earnings for 2011 exceeded the previous year's figures by 36.6 percent, with annual EPS of 2.61 toppling 2010's earnings of 1.91. Before the accounting scandal hit, analysts were expecting annualized growth in revenue and earnings to result in earnings growth of 20 percent in Q1 2012. Revenue growth had driving figures in 2011, with a compound annual growth targets at 20 percent thanks to growth in snack consumption despite slower consumer spending in other sectors. Until the SEC and Department of Justice conclude their investigations into Dimaond Foods's accounting irregularities, betting on earnings growth will remain a gamble. With analysts holding their reports on the company, there is less guidance to go by, so market response to the company's figures will remain difficult to gauge. A much bigger jump (or fall) in the stock will likely happen after the SEC concludes its inquiry, which will also open the company to acquire Procter & Gamble's PG Pringles brand. The deal had already been agreed to in April, with Diamond ready to pay $2.35 billion for the chip brand. While Proctor & Gamble have remained committed to the sale, analysts at RiverPoint Capital have estimated that there is a 50% chance of the deal failing.