Fresh Del Monte Produce Inc. posted a $9.6 million fourth-quarter loss as banana prices weakened, floods hurt crops in Guatemala and the company exited operations in Brazil, South Africa and the Philippines.

While Fresh Del Monte’s banana sales volume rose 4% during the quarter, lower prices in Asia and the Middle East led to a loss in the business, the company said in a March 1 statement. Global banana prices fell 2%, to $12.77 per 40-pound box, the Coral Gables, Fla.-based company said.

Excess banana supplies and weak prices pinched large fruit companies such as Fresh Del Monte and Chiquita Brands International last year, prompting production cutbacks. During a March 1 conference call with analysts, Mohammad Abu-Ghazaleh, Fresh Del Monte’s chief executive officer, said he expects market conditions to improve this year.

Del Monte earnings slip on weak banana market
Del Monte earnings slip on weak banana market

Abu-Ghazaleh 


Banana pricing “was tremendously weak in Europe and Asia throughout the year,” Abu-Ghazaleh said during the call, which followed the release of quarterly results. “I’m very confident in our future. I’m very optimistic for 2011.”

Net sales for Fresh Del Monte’s banana business rose 2.5% to $395.3 million during the three months ending Dec. 31. But the business posted a loss of $10.7 million, compared with a gross profit of $3.7 million a year earlier. Bananas accounted for 44% of Fresh Del Monte’s total sales last year.

Total sales fell 6.4% during the fourth quarter, to $816.7 million, Fresh Del Monte reported.

Flooding in Guatemala and an earthquake in Chile forced Fresh Del Monte to write off inventory, the company said, while slumping pineapple and melon sales also contributed to losses. Fresh Del Monte’s cutbacks included halting pineapple production in Brazil last year.

Fresh Del Monte’s gold pineapple sales fell 12% during the quarter, to $121.4 million, as volume dropped 16%, the company said. Melon sales plunged 58%, to $29.1 million, on a 57% volume decline.

The $9.6 million quarterly loss compares to net income of $28.2 million during the fourth quarter of 2009. For all of 2010, Fresh Del Monte’s profit tumbled to 57%, to $62.2 million, even as sales rose 7.3%, to $1.62 billion.

Fresh Del Monte’s results fell short of analysts’ expectations, sending the company’s shares lower. In midday trading March 1, the company’s shares fell $1.05, or 3.7%, to $27.53. The stock is still up about 10% this year.

Chiquita is scheduled to report quarterly results March 2 after the market closes.