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Dean Foods (DF) Q4 Earnings Coming Up: What's in Store?

Dean Foods CompanyDF is slated to report fourth-quarter 2015 results on Feb 16. In the last quarter, the company had delivered a positive earnings surprise of 20%. Let's see how things are shaping up for this announcement.

Factors Influencing this Quarter

Dean Foods' ongoing strategic initiatives focused on improving core business activities, cost productivity and creating a balance between pricing and volumes, position it well to generate enhanced returns. Also, the company outperformed the Zacks Consensus Estimate by an average of 17% over the past four quarters.

Additionally, with a solid operating performance, improved capital structure and additional benefits anticipated from its latest DailyPure brand as well as the popular TruMoo brand, the company remains on track to consolidate its position in the dairy industry, and boost shareholder value. Also, Dean Foods is optimistic about its prospects, as it anticipates the general commodity environment to remain favorable. Considering all the aforementioned factors, management expects fourth-quarter adjusted earnings to range from 28-38 cents a share.

However, competition from other players remains a threat. Moreover, volatility in raw material prices can impact margins and thereby hurt results.

Earnings Whispers

Our proven model does not conclusively show that Dean Foods is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Earnings ESP for Dean Foods is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 34 cents.

Zacks Rank: Dean Foods carries a Zacks Rank #1 (Strong Buy), which increases the predictive power of ESP. However, the company's ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

CST Brands Inc. CST has an Earnings ESP of +10.71% and a Zacks Rank #1.

Foot Locker Inc. FL has an Earnings ESP of +1.79% and a Zacks Rank #2 (Buy).

Avis Budget Group Inc. CAR has an Earnings ESP of +15.00% and a Zacks Rank #3 (Hold).

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AVIS BUDGET GRP (CAR): Free Stock Analysis Report

DEAN FOODS CO (DF): Free Stock Analysis Report

FOOT LOCKER INC (FL): Free Stock Analysis Report

CST BRANDS INC (CST): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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