Tuesday, Fresh Del Monte Produce Inc. (FDP), a producer of fruits and prepared food, reported a sharp decline in earnings for the first quarter, citing negative impacts from severe weather conditions in its banana and gold pineapple production areas in Costa Rica, lower melon selling prices, and a strong U.S. dollar against other currencies.
Net income for the quarter slid to $34.9 million or $0.55 per share from $63.6 million or $1.00 per share in the same period last year.
Excluding asset impairment and other charges, net income declined to $35.3 million from $68.2 million in the prior year period. Excluding items, earnings per share were $0.56, down from $1.07 per share in the year-ago quarter. On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.89 per share for the quarter. Analysts' estimates typically exclude special items.
Quarterly net sales declined marginally to $879.7 million from $894.9 million in the corresponding period last year, mainly due to lower sales in its prepared food business partially offset by higher banana selling prices. Three Street analysts expected the company to report sales of $921.27 million for the quarter.
Foreign currency loss was $6.1 million compared with a foreign currency gain of $10.9 million in the year-ago quarter.
Bananas segment net sales grew 6% to $361.5 million, primarily due to increased selling prices in the North America, Asia-Pacific and Middle East regions, partially offset by lower net sales and unfavorable foreign exchange rates in Europe.
Other Fresh Produce segment net sales were in line with the prior year period at $419.2 million, as sales increase in melon and gold pineapple product categories was partially offset by lower sales in tomato and fresh-cut product categories.
Prepared Food segment net sales declined 25% to $76.8 million mainly due to lower net sales in the company's canned fruit and beverage product categories, primarily in the United Kingdom, along with the negative impact of unfavorable foreign exchange rates in Europe.
Other Products and Services segment net sales declined 34% to $22.2 million primarily due to lower net sales in the company's third-party freight services and Argentine grain businesses.
FDP closed Monday's regular trading session at $17.03.
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