Chiquita narrows loss for 3Q
Chiquita Brands International Inc. posted a $6 million loss, or 13 cents per diluted share, on $840 million in revenue for its third quarter, as higher banana prices failed to offset continued weakness in its fresh salads business.
“We are making progress on all the elements of our profit improvement plans for salads, including permanent contract pricing and fuel-related surcharges, to deliver better margins over time,” said Fernando Aguirre, chairman and CEO of the Cincinnati-based consumer-products company. “Looking ahead, we continue to expect to achieve significantly better operating results for the full year versus 2007."
Chiquita’s third-quarter numbers are an improvement over the same period last year, when it posted a $26 million loss, or 61 cents per diluted share on revenue of $785.2 million.
And they were better than analysts were expecting. Those polled by Thomson Reuters in advance of Thursday's announcement were expecting a loss of 56 cents per share.
In a conference call with investors, Aguirre disclosed the company will begin selling fresh food products in China through a joint venture with a distributor "known for for its high-quality products creditreport."
"We believe that their local expertise combined with our strong brand and marketing capabilities will position us to successfully enter this promising market with new products within the next year," he said.
Net sales from its banana segment increased 13 percent to $474 million, driven by improved pricing in North America and favorable exchange rates in Europe, Asia and the Middle East. Chiquita’s salads and healthy snacks segment saw a 2 percent increase in net sales, to $325 million. Operating results were adversely impacted by higher fuel and transportation costs.
Chiquita (NYSE: CQB) estimated it would incur one-time costs of up to $25 million for the relocation of its European headquarters from Belgium to Switzerland.