(DMND) Diamond Foods – latest quarter’s earnings represented 29% growth, on a year-over-year basis

February 1st, 2009

Diamond Foods, Inc. (DMND) announced record snack sales and another quarterly earnings surprise. Analysts are projecting fantastic growth rates into 2010.

Company Description

Diamond Foods is a branded food company specializing in processing, marketing, and distributing culinary, snack, in-shell and ingredient nuts under the Diamond of California and Emerald of California brands. Diamond’s products include walnuts, pine nuts, pecans, peanuts, macadamia nuts, hazelnuts, cashews, Brazil nuts and almonds.

The company distributes is products to Asia, Europe, and the U.S. under the Diamond, Emerald, and Harmony brand names. Diamond is headquartered in Stockton, California, employs 750 people, and has a market cap of $421 million.

Record Earnings Last Quarter

Diamond reported first-quarter results for fiscal 2009 on Dec. 3. The company announced earnings per share of 67 cents, beating the consensus by 4 cents. This was the fourth earnings surprise in the past 4 quarters.

Net sales were $195.5 million, a 6% increase over the same quarter last year.

Michael J. Mendes, President and CEO, said “Looking ahead, our brands are well positioned to benefit from changes in spending patterns as consumers prepare more meals at home or look for greater value in their food choices.”

Record Snack Sales

Following up on the great quarterly results, Diamond announced record snack sales on Dec 23. Snacks grew 22% in Nov, to above $5 million, the best month on record.

Excellent Growth

The latest quarter’s earnings represented 29% growth, on a year-over-year basis. Currently, the full-year 2009 and 2010 consensus estimates are $1.28 and $1.65, respectively. These figures represent year-over-year growth rates of 41% and 29%.

The Chart

After shares of DMND made a short double bottom around $18, they rebounded and are above a key level of support once again. Take a look at the chart below.

Content Courtesy: Zacks Investment Research

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