Fresh Del Monte 2Q Net Rises 67% On Higher Prices; Misses Street ViewFont size: A | A | A
6:50 AM ET 8/2/11 | Dow Jones
DOW JONES NEWSWIRES
Fresh Del Monte Produce Inc.'s (FDP) second-quarter earnings rose 67%, aided by higher prices and fewer charges, but fell short of expectations due to a weak fresh-produce market in Europe.
"A depressed fresh produce market in Europe characterized by significantly lower banana and pineapple selling prices during the month of June, along with substantially higher fuel costs and continued competitive pressure in our melon business collectively impacted our financial results," said Chairman and Chief Executive Mohammad Abu-Ghazaleh.
Harsh weather in Guatemalan banana-production areas and higher fruit-production costs had hampered the company's bottom line for most of last year. But increased demand for bananas amid tightened industry-wide production helped to drive prices higher during the first quarter.
For the quarter ended July 1, Fresh Del Monte reported a profit of $35.2 million, or 59 cents a share, up from $21.1 million, or 34 cents a share, a year earlier. Excluding asset impairment and other charges, earnings fell to 77 cents from 85 cents. Revenue jumped 40% to $1.04 billion, due primarily to higher selling prices in all segments.
Analysts polled by Thomson Reuters had most recently forecast earnings of 96 cents on revenue of $1.02 billion.
Gross margin rose to 9.9% from 8.3%.
Banana sales, which make up nearly half of Fresh Del Monte's top line, increased 3.1%. Volume was 4% lower, while worldwide pricing increased 7%.
Sales of other fresh produce were up 4%, while prepared food sales rose 8.1%.
The company is sometimes confused with Del Monte Foods Co. (DLM), which is in the canned-vegetable business. Fresh Del Monte bought Del Monte Foods Europe in 2004 and has a perpetual royalty-free license to use the Del Monte trademark for certain products worldwide.
Shares closed Monday at $24.64 and were inactive premarket. The stock has risen 17% over the past year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com
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08-02-11 0650ET
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