Dole Food reports 21% decline in Q2 net earnings

Dole Food, a US-based producer and marketer of fruit and fresh vegetables, has reported that its net income from continuing operations fell about 21% to $66m for the second quarter ended 16 June 2012, compared to $83m in 2011.

The decline in net income can be attributed to lower sales in the company’s fresh fruit segment, although revenues in fresh vegetables and packaged foods businesses increased.

Revenues fell about 10% to $1.72bn, primarily due to the divesture of the company’s fresh fruit subsidiaries in Spain and Germany.

Adjusted EBIDTA for the quarter decreased 18% to $132m, compared to $161m in 2011.

Dole Food president and CEO David A DeLorenzo said the second quarter’s adjusted EBITDA was in line with expectations.

"The positive steps we have taken to restructure our European operations have partially offset the impacts of weaker currencies in Europe," DeLorenzo added.

Segment wise, fresh fruit revenues, including the impact of divestitures of fresh fruit subsidiaries, fell 18% to $1.13bn due to lower prices for bananas sold in North America and weak foreign currency exchange movements in Europe.

Fresh vegetables revenues rose 11% to $288.6m, due to higher sales of berries resulting from expansion of the company’s berry business and higher sales of packaged salads.

Revenues from packaged foods segment increased 7% to $291.3m, primarily due to increased sales of frozen fruit and healthy snacks in North America and higher pricing worldwide.

For the first half of 2012, the income from continuing operations decreased 2.4% to $83m; revenues fell 7.12% to $3.34bn; and adjusted EBITDA dropped 25.36% to $203m.

Meanwhile, Dole Food noted that it is evaluating a complete or partial separation of one or more of its businesses, including potential spin-offs, sales transactions and joint ventures, and has hired Deutsche Bank Securities and Wells Fargo Securities to review alternatives.