Dole begins to see benefits of sale; berries remain problematic

07/26/2013 01:53:00 PM
Coral Beach

DoleSurprising Wall Street, the Dole Food Co. Inc. reported second-quarter revenue increases from fresh fruit and vegetables and packaged salads. Investors earned 28 cents per share compared to the 11 cents financial analysts predicted.

During a July 25 conference call, C. Michael Carter, president and chief operating officer for Westlake Village, Calif.-based Dole, said the April completion of the sale of its global packaged foods business and its Asian fresh produce business to Japan’s Itochu Corp. make the second quarter results unique.

“The results this quarter are reflective of the inherent volatility and unpredictability of earnings from Dole’s smaller footprint as an international commodity produce company,” Carter said.

The $169 billion divestiture leaves Dole with its North American fresh vegetable business and fresh fruit businesses in North America, Latin America, Europe and Africa. The sale reduced overall sales, but also reduced operating expenses, according to Dole’s financial report.

For the second quarter of 2013, Dole posted $1.2 billion in revenue, a 10% increase compared to the same period in 2012. Fresh fruit revenue for the quarter was 12% higher than in 2012, primarily because of higher volumes of bananas in North America, diversified fruit in Europe and higher sales of fruit sourced from Chile, said Keith Mitchell, vice president and chief financial officer.

Dole’s vegetable segment posted second-quarter revenue of $309 million, an increase of 4% compared to the same period in 2012. Mitchell said the increase is related to higher volumes of packaged salads and overall higher pricing of fresh-packed vegetables, particularly celery.

However, Mitchell said the fruit and vegetable revenue improvements were partially offset by lower pricing for strawberries and blueberries.

Carter said Dole’s berry business saw a $17 million “negative swing” as a result of continued weather and quality issues in strawberries throughout the second quarter.

“We’re now expecting our strawberry business to be approximately $24 million below planned for the full year,” Carter said.

He said earnings in Dole’s pineapple business were similar to 2012, with higher pricing only partially offset by higher operating costs.

Reporters asked about David Murdock’s offer to buy Dole, but company officials said most of those questions should be addressed to a special committee formed by Dole’s board of directors.

“If you’re asking whether business as usual has been somehow or another adversely affected by the proposal, the answer is ‘no,’” Carter said.



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