Weaker melon, tomato sales hurt Fresh Del Monte net

by Eric Schroeder
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CORAL GABLES, FLA. — Higher fuel costs and slower sales of melons and tomatoes were partly to blame for a 16% decline in third-quarter net earnings at Fresh Del Monte Produce Inc. Net income in the period ended Sept. 30 was $12.2 million, equal to 21c per share on the common stock, down from $14.5 million, or 24c per share, in the same period a year ago. Excluding special charges, the company earned 22c per share.

Net sales for the quarter were $795.2 million, up narrowly from $793.1 million a year ago. Fresh Del Monte attributed the increase to expanded sales in the company’s other fresh produce business, along with contributions from its North America banana business. Partially offsetting the gain were lower sales in the company’s prepared foods business.

In the company’s Banana segment, net sales increased to $375.1 million from $370.1 million, driven by higher banana selling prices in the company’s North America region. Volume was 6% higher.

Net sales for the Other Fresh Produce segment climbed 2% to $337 million from $329.4 million. Fresh Del Monte said gold pineapple sales increased 9% during the quarter, while tomato and melon sales fell 32% and 28%, respectively, during the period.

“Given the global economic uncertainty and its impact on consumer markets, I am pleased with Fresh Del Monte’s solid operating results for the third quarter,” said Mohammad Abu-Ghazaleh, chairman and chief executive officer. “Our performance was driven by three major factors. We balanced product supply with market demand in spite of competitive and economic pressures throughout the world. We controlled costs while improving our operating efficiencies through our continuous process improvement model, and thirdly, we succeeded in expanding sales to non-traditional food channels and sustaining our growth in emerging markets. We remain committed to executing strategies that focus on prudent investment in growth markets and delivering shareholder value through efficiency improvements throughout our operations, while maintaining our commitment to further enhancing product quality and service.”

For the nine months ended Sept. 30, net income was $102.6 million, or $1.73 per share, up 43% from $71.8 million, or $1.16 per share, in the same period a year ago. Net sales were $2,808.9 million, up 3% from $2.736.2 million.
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