CINCINNATI – Chiquita Brands International Inc. (CQB), one of the world's biggest banana producers, on Tuesday said its first-quarter profit surged more than fourfold, citing robust banana sales, strong prices in Europe and North America, and favorable foreign exchange rates.
Chiquita (search), which also distributes fresh produce and other fruits, reported earnings of $86.5 million, or $1.94 per diluted share, in the three months ended March 31 compared with $19.9 million, or 46 cents per share, in the year-ago period.
Revenue rose 17 percent to $932 million from $793 million, with banana sales climbing 24 percent to $520 million.
Chiquita attributed the revenue rise to higher banana prices and sales volume in North America and Europe, favorable European exchange rates, and increased sales of other fresh produce.
But it expects to record a loss in banana supply of more than three million boxes from company-owned farms and independent suppliers, mostly in this year's first half, due to damage from flooding in Costa Rica and Panama.
The company also said it is seeing higher costs resulting from alternative banana sourcing, logistics and farm rehabilitation related to the floods. Those costs — including write-downs of damaged farms and the impact of lower volume — totaled $8 million in this year's first quarter, and are expected to total roughly $10 million to $15 million for the year.
Chiquita also said it is working on closing its $855 million acquisition of the Fresh Express (search) unit from Performance Group Co. (PFGC) The company said it believes it will have enough financing to close the deal by June 30, although the availability of financing could be affected by an investigation into conduct by certain employees that the company "believes did not comply with certain laws governing trade regulation."
Chiquita emerged from bankruptcy in 2002 after it filed for Chapter 11 bankruptcy protection in 2001 when it was unable to pay back its debts. At the end of the quarter its debt totaled $342 million, down from $349 million at the end of last year.