Improved pricing, efficiencies boost Chiquita earnings

by Staff
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CINCINNATI — Pricing actions and improved efficiencies throughout its operations and supply chain led to improved earnings for Chiquita Brands International, Inc. during the second quarter of fiscal 2009. Net income for the quarter ended June 30 was $89 million, equal to $2 per share on the common stock, which compared favorably to the same period during fiscal 2008 when Chiquita’s net income was $61 million, or $1.40 per share.

Sales for the quarter declined slightly, easing to $955 million from $995 million during the second quarter of 2008.

"Our second-quarter results mark our best quarterly performance in the past decade and are a testament to our strategic focus and our pricing and cost discipline," said Fernando Aguirre, chairman and chief executive officer. "We are particularly pleased with our value added salads business, which is showing significant and sustainable profit improvement. The plans we began executing several months ago to achieve network efficiencies and manufacturing cost reductions are working well. Additionally, our profit focus continues to deliver strong results in bananas, which benefited from record high pricing in Europe and sustained pricing in North America."

Net sales for Chiquita’s Banana segment decreased 1% to $557 million, due to lower European exchange rates, which were largely offset by record local banana pricing in core European markets, according to the company. On a comparable basis, operating income increased 8% to $96 million, compared with $89 million in 2008. The $7 million increase was principally due to favorable local pricing in Europe, as well as in Asia and the Middle East, partially offset by lower European exchange rates and higher purchased fruit and logistics costs.

In the company’s Salads and Healthy Snacks segment sales decreased 13% to $305 million, primarily the result of a planned reduction in food service volumes in North America. Operating income for the quarter was $30 million in the business unit compared with a loss of $6 million the year before.

For the first six months of the year net income was $112 million, or $2.52 per share. Net income was $92 million, or $2.08 per share, for the first six months of 2008. Sales for the period were $1,796 million compared with $1,930 million during 2008.

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