Chiquita Brands International Inc. said it expects âsubstantiallyâ lower first-quarter financial results after a harsh winter and weak economy in Europe pressured banana prices.
European banana revenue during the first quarter was lower than expected, with prices down about 11% compared with the same period in 2009 and sales volume down 13%, Chiquita said in a statement late today.
Chiquita still projects income of $110 million to $120 million for 2010, chief executive officer Fernando Aguirre said, reiterating a forecast made in February.
âWe continue to be confident of achieving our full-year target of $110 to $120 million of comparable income, even as our first-quarter results will be substantially lower than 2009,â he said.
European banana pricing, based on local currencies, fell 8% in February and 18% in March, compared with the same months in 2009, Chiquita said.
Prices were ânegatively affected by the harshest winter weather in 30 years and depressed economic conditions, which have affected commerce all over Europe, particularly in the south,â Aguirre said in the statement.
While banana prices during the quarter did not follow typical seasonal patterns, Aguirre still expects prices to strengthen compared to 2009 levels as the year progresses âas tightening industry supplies in Latin America and Asia begin to restore the balance of supply and demand,â according to todayâs statement.
Chiquita projects financial results in the second half of 2010 will improve, citing âaggressive pricing actionsâ and âexecuting significant cost improvements throughout our supply chain.â
âThis should allow us to overcome these early headwinds in our European business,â the company said.
In the fourth quarter, Chiquita posted a larger than expected loss of $27 million amid weaker salad sales, even as overall revenue rose 4.8%, to $879 million. Net sales in bananas, Chiquitaâs largest business segment, rose almost 15%, to $568 million.
Shares of Chiquita fell 41 cents, or 2.5%, to $16.10 in after-hours trading, according to Yahoo! Finance. The stock is down almost 11% this year.
Separately today, Chiquita said it formed a joint venture with Paris-based Danone SA to market fruit beverages in Europe under Chiquitaâs Just Fruit in a Bottle brand.