Diamond Foods Earnings: Investors are Not Pleased with These Results

Diamond Foods Inc. (NASDAQ:DMND) reported its results for the first quarter. Diamond Foods is a food company that deals in processing, marketing, and distributing culinary, in-shell, and ingredient nuts and snack products.

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Diamond Foods Inc. Earnings Cheat Sheet

Results: Reported a loss of $10.7 million (49 cents per diluted share) in the quarter. Diamond Foods Inc. had a net income of $10.8 million or 47 cents per share in the year-earlier quarter.

Revenue: Fell 10.1% to $258.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Diamond Foods Inc. reported adjusted net income of 24 cents per share. By that measure, the company beat the mean estimate of 23 cents per share. It fell short of the average revenue estimate of $275.3 million.

Quoting Management: “Our first quarter results reflect some progress against our new brand strategies, but we continue to face headwinds with respect to walnut supply and a highly leveraged balance sheet,” said Diamond’s Chief Executive Officer Brian J. Driscoll. “Reduced promotional spending on our snack brands and a shift in the timing of advertising spending to later in the year were the largest contributors to improvement in our margins in the first quarter.”

Key Stats:

Revenue has been on the decline for three quarters in a row. In the fourth quarter of the last fiscal year, revenue declined 3.8% to $224 million while the figure fell 6.9% in the third quarter of the last fiscal year from the year earlier.

The company topped expectations last quarter after falling short of forecasts in the fourth quarter of the last fiscal year with net income of 2 cents versus a mean estimate of net income of 24 cents per share.

Last quarter, gross margins grew to 22.7%, a 1.3 percentage points difference from the year-earlier quarter. This ends a streak of two consecutive quarters of shrinking margins.

Looking Forward: Over the past ninety days, the average estimate for the second quarter has fallen from $1.15 per share to 11 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $3.17 a share to 31 cents over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)