(Feb. 24) Nature apparently has had a hand in the latest financial statement at Chiquita Brands International, which reported a fourth-quarter net loss Feb. 23.

Fallout from Hurricane Stan in October and Tropical Storm Gamma in November have created a supply shortage that likely will last into the spring and sent the cost of bananas skyward, the company said.

The Cincinnati-based company also attributed part of its fourth-quarter net loss of $19 million — 45 cents per share — to recent consolidation of its fresh-cut fruit operations in the Midwest.

A year earlier, Chiquita reported earnings of $25.1 million, or 61 cents a share, for the same period.

Chiquita said it took a $17 million hit from flooding in Honduras related to Gamma and a $6 million charge resulting from consolidation of the fresh-cut operations that stemmed from the company’s purchase last summer of Salinas, Calif.-based Fresh Express Inc.

However, Chiquita did see a sales increase of 30% for all of 2005, to $999.1 million, from $768.3 million a year earlier.

For the year, Chiquita reported earnings of $131.4 million, or $2.92 per share, compared with earnings of $55.4 million, or $1.33 per share, for 2004. Sales increased 27%, to $3.9 billion, from $3.07 billion the previous year.

“We had a terrific year in 2005,” Fernando Aguirre, chairman and chief executive, said in a press release. “In fact, we realized the best annual financial results in more than a decade in spite of fourth-quarter challenges of flooding in Honduras, the impact of lower year-over-year euro-dollar exchange rate and continuing high costs for fuel and ship charters.”

Chiquita shares closed at $17.91 Feb. 22 on the New York Stock Exchange. The stock had a 52-week range of $16.80-31.09.

Meanwhile, the company has had to fight its way through the aftereffects of last fall’s stormy weather.

Bananas were in short supply early in February, said Chiquita director of corporate communications Mike Mitchell.

“There are banana volume shortages that are affecting the industry,” he said. “Supplies for the replacement routes for Guatemala and Honduras have been limited because of some cool and rainy weather in some other places, like Costa Rica, the north coast of Guatemala, Ecuador and Colombia, that have resulted in lower-than-usual production yield.”

Shortages likely would continue for the short-term, Mitchell said.

“We do expect them to continue this quarter, and we hope that the situation will begin to normalize in mid- to late second quarter,” he said.

Meanwhile, the company is finding alternate sources for supplies, Mitchell added.

“As I said, it has been a bit tougher than usual because some of the other areas outside Guatemala and Honduras have some of their own issues,” he said.


Wholesalers have had to cope more with higher prices than short supplies, although the latter had been a problem for awhile, said David Sanchez, banana buyer with Los Angeles-based Valley Fruit & Produce Co.

“Right now, the price is $19.50,” said Sanchez, who said he handles Dole bananas.

The supply shortage has eased somewhat, Sanchez said.

“They’ve had a lot of problems there, so it has cut into the bananas, and now it’s wintertime down t here, and it’s cold.”

Sanchez estimated the shortage has affected about a quarter of his business.

“I was unable to get them for about one month,” he said.

The supply situation had improved by mid-February, Sanchez said.

High prices are harder to gauge, though, he said.

“I’m working week to week, and we’re seeing the same prices, around $20,” he said. “We expect to see that for another month.”

Stanley Greenspan, senior buyer with St. Louis-based United Fruit & Produce Co. Inc., said supplies had improved.

“The supply was short on them, but they have ample supply now,” he said. “But the price is running 40% to 50% higher than normal. We’ve filled all the (supply) holes, but we’ve had higher prices. They’ve even raised their contracts to $14, which is $4 more than they were to the contract people.”