Chiquita swings to 1Q profit of $31.7 million
CINCINNATI—Chiquita Brands International Inc. says it swung to a profit in the first quarter on higher banana prices and a restructuring.
Chiquita reported Thursday earnings of $31.7 million, or 72 cents per share, for the quarter ended March 31, compared with a loss of $3.4 million, or 8 cents per share, a year ago. Sales rose 6.5 percent for the quarter to $1.27 billion from $1.19 million last year.
The company said the net income included a charge of $9 million, or 20 cents per share, for the write-off of deferred financing fees as a result of the company's refinancing during the quarter.
The Cincinnati-based producer of bananas and other fresh-cut fruits and packaged salads says continued recovery in salads also contributed to the improved results.
Analysts polled by Thomson Financial expected earnings of 41 cents per share on revenue of $1.24 billion.
"We have demonstrated the ability to overcome cost challenges and we expect this improvement will continue, particularly in the first half of the year," Fernando Aguirre, chairman and chief executive officer, said in a statement.
Aguirre also said Chiquita successfully refinanced its capital structure and signed agreements to develop two major sources of bananas in Africa for its European markets without investing any capital in owned assets.
He told analysts later in a conference call that there is some concern over rising costs, but added that Chiquita products are lower-priced than many other food items in grocery stores. He added sales might also benefit from more people buying food at stores and eating at home instead of at restaurants.
Chiquita shares closed down 66 cents at $22.09 in trading Thursday before the earnings report was released. The stock has traded from $13.31 to $24.13 the past year.
Analysts surveyed by Thomson Financial are expecting earnings of $1.67 per share on revenue of $4.8 billion for the year.
Chiquita does not provide specific forecasts for net sales and net income.
The company said in October that it would begin cutting about management and production jobs, close facilities and leave businesses as part of a restructuring plan to reduce costs annually by $65 million to $80 million. Chiquita said Thursday it remains on track to achieve that goal in 2008.
The company has about 24,000 employees in more than 70 countries.
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