Dole Food Co. said it returned to profit in the first quarter on improving sales and stronger global prices for bananas and other fresh fruits.
Revenue in fresh fruit, Dole’s largest business, rose 5.4% to $1.18 billion during the quarter, reflecting higher banana sales in Asia and North America, the company said in a May 3 news release. Dole also had higher sales volumes in Chilean deciduous fruit, offsetting lower banana sales in Europe.
The first quarter marked a “turnaround” on two fronts for Dole’s fresh fruit business, David DeLorenzo, the company’s chief executive officer, said in the release. Market conditions in Asia and Europe strengthened, and Dole benefited from a restructuring that improved the “cost position” of its European operations, he said.
Additionally, revenue rose in Dole’s packaged foods and fresh vegetable operations as both units “continued to have strong performances,” DeLorenzo said.
Some packaged foods earnings growth was offset by increased marketing spending for the launch of the company’s fruit bowls in 100% juice, he said.
Overall, “we remain optimistic about achieving significantly improved results in 2011 over 2010,” DeLorenzo said.
Financial prospects for Dole and other large, multinational fruit companies brightened this year as the global banana market recovered from a deep slump triggered by excess supplies, cold weather and recession. Dole, Westlake Village, Calif., was also hurt by storms and floods that cut banana harvests in Latin America.
Also May 3, Fresh Del Monte Produce Inc. said first-quarter profit rose 52% as stronger global demand led to “significant” improvement in banana prices. Fresh Del Monte, Chiquita Brands International Inc. and Dole account for about 85% of U.S. banana imports, according to analysts.
Dole reported that net income from continuing operations was $2 million during the three months ending March 26, compared with income of $22 million for the same period a year earlier. In the final two quarters of 2010, Dole posted a combined net loss from continuing operations of $89 million.
Net revenue rose 5% to $1.69 billion in the first quarter, Dole said.
Global banana prices averaged $15.28 per 40-pound box during the first quarter, up 9% from the same period a year earlier, Fresh Del Monte said May 3.