Earnings Preview for Dean Foods (DF, GIS)

Dean Foods

is expected to announce its Q1 earnings results on Tuesday, May 10, before the markets open. Analysts are expecting earnings per share to be $0.06, or a fall of 73.9% on Q1 2010. Revenues are projected to stand at $3.07 billion, or an increase of 3.3% year-over-year. Dean Foods Company is a food and beverage company, which operates through two segments: Fresh Dairy Direct and WhiteWave-Morningstar. Looking ahead, analysts expect earnings per share in Q2 to be $0.13, or down 55.2% on Q2 2010. The second half of the year is expected to be somewhat better for Dean Foods. The company is still expected to post smaller earnings per share in 2011 than in previous year. The fall in earnings per share is expected to be smaller for the whole year than in the first two quarters, however, with the 2011 earnings per share estimated to be 27.5% lower than a year ago. In the upcoming quarter, analysts expect revenues to stand at $3.19 billion, or 7.9% higher than in Q2 2010. For the whole year, revenues are projected to reach $12.66 billion, or an improvement of 4.4% on 2010. Last year has been difficult for Dean Foods, whose profits were hurt by rising costs of commodities and falling demand. Investors will be hoping that strong Q1 results might be a sign that Dean Foods has turned a corner. Dean Foods has recently agreed to settle an antitrust complaint filed by the Justice Department by agreeing to sell a milk processing plant. Dean Foods was accused of acquiring too much market power after its purchase of processing plants in Waukesha and DePere, Wisconsin, from Foremost Farms in 2009. According to Reuters, Dean Foods decided to settle because this lawsuit was "expensive, distracting and brings uncertainty to our business." Dean Foods' recovery might be jeopardized by stiff competition, however. General Mills

is set to buy a 50% stake in French yogurt maker Yoplait for roughly $1.1 billion. Last year, General Mills agreed to acquire the Mountain High yogurt brand from Dean Foods. The majority of rating agencies currently have a Hold rating on Dean Foods. Its shares ended last week at $10.97. In the last 30 days, Dean Foods added 6.3% to its value.