(May 2, 3:25 p.m.) Chiquita Brands International Inc. posted a profit of $31.7 million in the first quarter, a big swing from the $3.4 million loss the Cincinnati-based company reported in the year-ago period.

“This is third quarter in a row that we have improved our operating performance year over year,” chairman and chief executive officer Fernando Aguirre said during a May 1 conference call.

Aguirre attributed the successful quarter to higher banana prices, favorable exchange rates, continued recovery in the bagged salad business and benefits from the restructuring the company announced late last year.

Net sales increased 7% to $1.3 billion in the quarter. Per-share earnings were 72 cents, compared to a 20 cent loss in the first quarter last year.

Net sales in the company’s banana business increased 12%, to $584 million. Volume decreased by 1% in North America and 14% in Europe because of limited supplies, but pricing increased 18% in North America and 26% in Europe, based on the U.S. dollar.

Chiquita instituted a price surcharge in North America during the quarter after unfavorable weather in Latin America drastically reduced supplies.

Chief financial officer and senior vice president Jeffrey Zalla said the temporary surcharge remains in effect in North America, and the company does not expect supplies to improve soon.

“We were very transparent and open with customers, and they accepted it,” Aguirre said of the surcharge. “This is still a very reachable category. Banana pricing is very acceptable. We hadn’t seen prices increase in the past 10 to 15 years.”

Chiquita reached supply agreements in Angola and Mozambique during the quarter and expects to start sourcing product there by 2010. Aguirre said the deals will provide 20% to 30% of the company’s volume for European markets. He also said that unlike bananas Chiquita sources from Latin America, the African product will not be subject to tariffs, regardless of the outcome of ongoing challenges to the European Union’s banana tariff import regime.

In the bagged salad and healthy snacks business, Chiquita’s sales increased 12%, to $327 million. Aguirre said he was pleased but not completely satisfied with the category’s gradual recovery from a 2006 E. coli outbreak linked to fresh spinach.

“This is still an underdeveloped category, in our eyes,” he said. “We see the future as very promising.”

Aguirre said that usage frequency in the category is 12 bags per person per year, and the company’s goal is to double that figure. He said household penetration in the category is 70%. However, Aguirre said that if the produce industry could match the 90% household penetration of salad dressing, bagged salad category sales would increase from $3 billion a year to $9 billion.

Net sales in Chiquita’s other produce businesses fell 5% to $360 million, due in part to the company’s decision to exit some unprofitable farms in Chile last year.

Meanwhile, Zalla said the restructuring announced last year saved the company $18 million in the quarter. He said the company estimates the plan will save the company $65 million to $80 million this year.

Zalla said those savings will help the company deal with rising costs. Chiquita experienced $50 million in higher industry costs in the quarter for things such as raw product, fertilizer, fuel and ship charters. The company expects increased costs to total $150 million to $165 million this year.