Growth in its global fresh-cut business helped Del Monte Fresh Produce Inc. post third-quarter earnings that almost doubled those for the third-quarter of 2011.
The company reported earnings per diluted share of 40 cents for the third quarter of 2012 compared with 21 cents in the third quarter of 2011. Net income for the third quarter was $23.5 million, compared with $12.2 million in the third quarter of 2011.
During an earnings conference call with investors and media Oct. 30, chairman and chief executive officer Mohammad Abu-Ghazaleh said changes in the company’s approach to business in Southern Europe is another key factor in the boost.
Abu-Ghazaleh “The decision to take full control of the marketing, sales and distribution of our products at the beginning of the year in Southern Europe contributed to our improved performance,” he said. “We also realized efficiency improvements in our logistics and cost control initiatives that directly improved our bottom-line performance.”
The Coral Gables, Fla.-based company reported net sales for the third quarter were $788.8 million, compared with $795.2 million in 2011. Officials said the decrease was primarily because of lower net sales in the banana segment, primarily linked to continued lower banana sales volume in the Middle East secondary markets and in Europe.
Banana sales dropped 4% to $359.8 million for the quarter, compared to $375.1 million in the third quarter of 2011. Banana volumes were off by 6% for the quarter compared to the same time last year. However, gross banana profits were $12 million compared to a loss of $1 million for 3Q in 2011. Banana unit costs were 1% lower, mainly because of lower ocean freight rates, according to Del Monte’s earnings sheet.
In other fresh produce commodities, Del Monte reported:
- Gold pineapple: Net sales decreased 5% to $122.9 million. Volume decreased 2%. Pricing decreased 3%. Unit cost was 4% higher;
- Fresh-cut: Net sales increased 6% to $98.4 million. Volume decreased 4%. Pricing increased 11%. Unit cost was 6% higher;
- Melons: Net sales decreased 46% to $7.2 million. Volume decreased 47%. Pricing increased 3%. Unit cost was 8% higher;
- Non-tropical: Net sales increased 14% to $60.6 million. Volume increased 16%. Pricing decreased 2%. Unit cost was 7% lower; and
- Tomatoes: Net sales decreased 3% to $15.9 million. Volume decreased 1%. Pricing decreased 3%. Unit cost was 2% lower.