Dean Foods Company (DF - Analyst Report) reported second-quarter 2016 results, wherein adjusted earnings of 38 cents per share surged 15.2% from 33 cents in the year-ago quarter driven by strong execution across all departments. Earnings for the quarter came in at the higher end of the company’s guidance range of 32–40 cents. However, bottom-line results fell short of the Zacks Consensus Estimate of 39 cents.

Management expects third-quarter 2016 adjusted earnings to range from 32–40 cents a share, while GAAP earnings is expected to be in the range of 28–36 cents.

Earnings Estimate Revision: The Zacks Consensus Estimate for 2016 has trended upward over the last 60 days. If we look at Dean Food’s performance in the trailing four quarters (including the quarter under review), the company has outperformed the Zacks Consensus Estimate in all four quarters, resulting in an average surprise of 10.4%.

DEAN FOODS CO Price and EPS Surprise

DEAN FOODS CO Price and EPS Surprise | DEAN FOODS CO Quote

Revenues: Dean Foods’ net sales plunged 8.2% year over year to $1,848.8 million, but surpassed the Zacks Consensus Estimate of $1,836 million.

Key Events: On Jun 20, 2016, Dean Foods completed the acquisition of Friendly’s Ice Cream – a retail and manufacturing ice cream business, from Friendly’s Restaurants. This acquisition is likely to enhance Dean Foods’ already strong ice cream business, which includes famous brands like Mayfield and Dean’s Country Fresh. Dean Foods is sponsoring this $155 million deal, with cash and its current revolving facilities.

Zacks Rank: Currently, Dean Foods carries a Zacks Rank #1 (Strong Buy) which is subject to change following the earnings announcement.