Despite a 4% slip in net sales, Cincinnati-based Chiquita Brands International reported on Aug. 6 an increase in income from continuing operations for the second quarter on a comparative basis as a result of its profit-improvement stratagies and cost reduction initiatives.

Leading the way was the company's value-added salad business, which despite a 13% decrease in net sales because of a previous reduction in North American foodservice volume, reported operating income of $30 million, compared to a loss of $6 million for the same quarter in 2008

``We're very pleased by the progress we continue to make,'' Fernando Aguirre, chairman and chief executive officer for Chiquita said during a teleconference. ``We had an outstanding second quarter, our strongest in more than a decade. And the best news is that the changes we've made are sustainable. It's a testament to our strategic focus and our pricing and cost discipline.

``We're 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.''

For the quarter, Chiquita reported income from continuing operations of $89 million, or $1.95 per diluted share, compared to $58 million and $1.21 per diluted share in 2008. On a comparable basis, which excludes items affecting comparability such as restructuring costs and interest expense, income from operations was $95 million, up from $55 million in 2008.

Aguirre said the company's salads and healthy snacks segment, previously projected for a 3%-4% operating margin for 2009, was now on track for at least 6%, though it's expected not to be as robust in the second half of the year because of seasonal patterns.

``During the past year in salads, we eliminated over 500 items, or SKUs (stock keeping units),'' Aguirre said. ``That reduced all the costs and expenses of boxes, labels, packaging, shipping. We kept only products that meet our goals for growth.''

Chiquita's banana segment dipped 1% in net sales because of lower European exchange rates, but operating income increased 8% because of favorable pricing in Europe.

Aguirre said the economic strategies that helped Chiquita to its best quarter in a decade were expected to lead the way to extended growth through the end of the fiscal year.

``The economic environment continues to be a challenge,'' he said. ``However, we're confident we're in position to win in any economic environment. We expect to deliver a third consecutive year of profitable performance on a comparative basis.''

Chiquita reports strong second quarter