Despite anticipation of heavy operating losses for the fourth quarter of 2012, Chiquita Brands International Inc. officials are optimistic that savings in operational costs and stronger banana pricing and sales will improve the balance sheet this year.
In a preview of fourth-quarter and full-year reports for 2012, Charlotte, N.C.-based Chiquita officials said in a news release they expect to post an operating loss of $188 million to $233 million for the last quarter of 2012, compared with an operating loss of $12 million for 2011’s fourth quarter.
Net sales are expected to be flat as officials anticipate 2012 to come in at $3.1 billion, mirroring net sales of $3.1 billion in 2011. According to the Wall Street Journal, the company’s stock has dropped 15% in the past 12 months.
A date has not yet been publicly released for the announcement of the official fourth-quarter and year-end reports, said Chiquita spokeswoman Tiffany Breaux on Jan. 28.
The company’s goal for the next two to three years is to increase operating margins in bananas by 4% and in salads by 7% to 8%, according to the release. Chiquita has already expanded its salad program, providing more product offerings in the value-added salad market, including branded and private-label packaged salads, organic packaged salads and whole head lettuce, according to the release.
Since Sept. 30, Chiquita increased banana shipments, adding 5 million more boxes in North American banana business. It also gained private label business from certain retail grocery customers. That is scheduled to begin at the end of the first quarter this year, with an estimated volume of 1.6 million cases for 2013.
The company’s fourth-quarter sales totaled about $738 million, up about 2% from $722 million in the 2011 fourth quarter.
For the full-year report on 2012, Chiquita officials predict their final numbers will show operating losses between $236 million and $281 million, compared with an operating income of $34 million in 2011.
Most of the costs of relocating its headquarters from Cincinnati to Charlotte have been logged, according to the release. However, cash payments related to restructuring will continue through 2014, “primarily related to severance payments to the former chief executive officer,” the release said.
Restructuring included eliminating employees across the company and consolidating Midwest salad operations into a single location. That salad facility is expected to be completed in the third quarter of 2013 and is expected to save the company $8 million annually.
Other “strategic initiatives” are projected to result in $60 million annual savings beginning this year.