Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Diamond Foods is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

The controversy that ensnared Diamond Foods in late 2011 and early 2012 cost it what could have been a game-changing acquisition in the snack-foods space. Since then, the company has struggled to mount a comeback. Let's take an early look at what's been happening with Diamond Foods over the past quarter, and what we're likely to see in its quarterly report on Monday.

Stats on Diamond Foods

 

 

Analyst EPS Estimate

$0.06

Year-Ago EPS

$0.01

Revenue Estimate

$239 million

Change From Year-Ago Revenue

(8.9%)

Earnings Beats in Past 4 Quarters

2


Source: Yahoo! Finance.

Will Diamond Foods leave investors hungry this quarter?
Analysts haven't been very optimistic about Diamond Foods' prospects over the past few months, as they've slashed their earnings estimates for the just-ended quarter in half, and lowered their calls for the full 2013 fiscal year by $0.04 per share. The stock, though, has bounced back substantially after apparently hitting bottom, up 16% since early December.

One big cause for analyst uncertainty has been the fact that Diamond had to restate all its earnings over the past two years in light of its ill-fated decision to use a controversial method of accounting for certain payments to farmers. In the aftermath of those restatements, Diamond hasn't regained Wall Street's confidence, especially given the huge consequences of its failure, which resulted in Diamond having to cancel its agreement to purchase the Pringles snack line from Procter & Gamble .

But last month, investor interest in Diamond has heated up, with BlackRock having disclosed a nearly 8% stake in the snack-food maker. Blackrock's move doesn't appear to have activist intentions, and investors are taking the move as a sign of support for new CEO Brian Driscoll, who has experience handling snack foods from his time at Hostess Brands.

Still, the company is dealing with litigation from angry shareholders. Diamond got favorable news from a court in Delaware last week, when it dismissed a case brought by shareholders seeking damages for damage to the company's reputation. But the decision cited the fact that the proper forum for the suit is in California, where another suit is ongoing.

In its quarterly report, watch for Diamond Foods to address ongoing concerns about its accounting practices, and its relationships with growers. If the company can truly fix the damage it caused, then its cheap shares may become a true bargain.

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The article Diamond Foods Earnings: An Early Look originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends BlackRock and Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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