Dole Food Co. Inc., the largest U.S.fresh fruit and vegetable producer, said on Thursday that higher banana prices, fresh fruit sales and cost-cutting upped second-quarter profits, but warned that the third quarter might not meet forecasts.
Shares of Dole sank as much as $1.73, or 8.7 per cent, to $18.10 Thursday on the New York Stock Exchange, but rebounded late to close at $19.00.
The shares hit a 15-month high at $19.96 Wednesday and have outperformed the Standard & Poor's 500 index by about 35 per cent since the start of the year.
Third-quarter earnings per share from ongoing operations may be slightly below consensus estimates, but better than the 2-cent loss reported a year ago, Dole President Lawrence Kern said in a press conference.
"We are saying that it may slip by a little bit, but we are just at the beginning of the quarter and we wanted to be conservative," Kern said.
In the second quarter, Dole said, growth in its packaged salads business partly offset an overall decline in profits from fresh vegetables.
Startup and maintenance costs pared earnings in processed foods.
Dole reported income of $50 million from ongoing operations for the quarter ended June 16, or 90 cents per diluted share, compared with $45 million, or 81 cents, a year ago.
Results were in line with the company's own guidance issued last month of earnings from ongoing operations of 88-93 cents per share, which was about 50 per cent above Wall Street forecasts.
The company reported net income of $37 million, or 66 cents a share, including an $8 million pretax gain related to sale of investments and the $28 million of pretax expenses primarily from the shutdown and asset sales of its California deciduous and Northwest apples business.
Revenues slipped to $1.23 billion from $1.24 billion a year ago.
Increased sales volume, price increases in North America and stronger banana prices helped boost fresh fruit profits, partly offset by weak yen and euro exchange rates, Dole said.
Processed foods business earnings dipped on costs from the launch of FRUIT-N-GEL BOWLS, timing of manufacturing and plant maintenance for pineapple canning, increased marketing of new products and competitive pricing in the Honduran beverage business, Dole said.