Dole net falls
54%; warns woes
to continue
The company says low
From staff and wire reports
banana prices in Europe will
hurt third-quarter profits
WESTLAKE VILLAGE, Calif. -- Dole Food Co., the world's largest producer and marketer of fresh fruit, said second-quarter earnings fell 54 percent and warned that depressed banana prices in Europe will push profit lower in the third quarter.
Net income from operations, after interest and taxes, fell to $37.5 million, or 66 cents a share, from $82.1 million, or $1.35, a year ago. The company was expected to earn 64 cents, the average estimate of four analysts surveyed by First Call Corp, according to Bloomberg News. Dole shares closed down 44 cents to $29.19 on Wall Street. They've fallen 40.6 percent in the past year.
In addition to the operating net, Dole had a one-time gain of $9.9 million, or 17 cents a share, in the latest quarter from insurance proceeds related to last year's Hurricane Mitch banana crop damage. That brought the total net income of $47.4 million, or 83 cents a share. Quarterly revenue rose 13 percent to $1.32 billion from $1.16 billion.
Dole said profits are being squeezed by an unexpected increase in the number of banana-import licenses in the European Union, which are causing a surplus of bananas there and depressing prices. The EU's licensing decision came after the U.S. imposed trade sanctions against it, citing unfair import rules for bananas. Dole said lower banana prices will drop third-quarter profit below the 26 cents a share it earned in the 1998 third quarter. Westlake Village, Calif.-based Dole was founded in Hawaii in the middle of the last century and still has substantial land and agricultural operations in the state.
