Dole blames El Niño
for earnings hit

The weather boosted supplies
of bananas, cutting prices
and profits

By Russ Lynch
Star-Bulletin

Weak prices in the North American banana market pulled down first-quarter earnings for Dole Food Co.

The company today announced a first-quarter profit of $22.8 million, or 37 cents a share, down 45.7 percent from $42 million, or 70 cents a share, in the first quarter of 1997.

The company said the weakening of some currencies, particularly the Japanese yen, also adversely affected earnings. Revenues for the latest quarter, $1.01 billion, were up 5 percent from $964,992 in the year-earlier period.

Banana prices were down because of a strong supply, the company said.

"The banana business has been affected by the unusual weather conditions of El Niño, which have disrupted the normal supply pattern," said David H. Murdock, Dole chairman and chief executive officer.

"The business has improved since the first quarter and we expect this to continue throughout 1998."

"The company's vegetable operations continue to meet and exceed expectations and all other businesses continue on track with targeted volume and earnings gains being met," Murdock said.

First-quarter operating income totaled $41.7 million, down 31.4 percent from $60.8 million in the first quarter of last year.

The company cut its interest expense by 13 percent to $14.7 million in the latest quarter, compared with $16.9 million in the year-earlier period.

Murdock said that was achieved mainly by reducing the company's debt level.

Dole's stock was up 25 cents at noon today on the New York Stock Exchange, trading at $48.44.

Westlake Village, Calif.-based Dole had its origins in the Hawaii pineapple and sugar business in the middle of last century and now is a worldwide grower and distributor of fruits and vegetables.

Dole is still a big producer of fresh Hawaiian pineapple and has other agricultural interests in the islands.