Chiquita Brands 'not satisfied' with quarterly results

by FoodBusinessNews.net Staff
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CINCINNATI — Chiquita Brands International, Inc. posted net income of $8.6 million, equal to 20c per share on the common stock, during the second quarter ended June 30, down 62% compared with net income of $22.9 million, or 54c per share, during the same quarter of the previous year.

Net sales for the quarter were $1,255,400,000, a 2% increase compared with $1,228,600,000 during the same quarter of 2006.

"We were not satisfied with our second-quarter results," said Fernando Aguirre, chairman and chief executive officer. "We are taking aggressive actions to address continuing challenging market conditions and expect to reverse the recent trend and begin delivering modest year-over-year improvements in operating results starting in the third quarter."

The company said quarterly sales rose mainly as a result of increased banana volume in European trading markets. The company also said operating income decreased year-over-year as a result of lower results in the Salads and Healthy Snacks segment and in Other Produce segment.

In the Bananas segment, operating income was $44 million, a 10% increase compared with $41 million last year. Sales in the segment also increased 3% to $528.5 million compared with $511.6 million during the same quarter of the previous year.

The Salads and Healthy Snacks segment had an operating income of $13.3 million, down 28% compared with an operating income of $18.5 million during the same quarter of the previous year. Sales in the segment were $333.4 million, which was a 2% increase compared with $328.1 million during the same quarter of 2006.

The Other Produce segment experienced a loss of $1.3 million, which compared with operating income of $3.4 million during the same quarter of the previous year. Sales in the segment were $393.5 million, which was up 1% compared with $388.9 million during the same quarter of the previous year.

"We remain confident in our strategy to generate sustainable, profitable growth by delivering innovative higher-margin products and building a high-performance organization," Mr. Aguirre said. "We were pleased to complete the previously announced strategic shipping agreement during the quarter and use a significant portion of the proceeds from that transaction to pay down debt. We will continue to take actions to strengthen our balance sheet, improve our risk profile, focus our efforts on market activities and diversity our company by product, channel and geography."

For the six months ended June 30, the company posted net income of $5.2 million, or 12c per share, which was down 88% from net income of $42.4 million, or $1.01 per share, during the same period of 2006.

Net sales for the six months were $2,447,800,000, up 3% compared with sales of $2,382,300,000 during the same period of the previous year.

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