Fresh Del Monte's stock falls as lower banana sales lead to downbeat earnings

By Tomi Kilgore

Company booked a $131.2 million impairment charge after a review of operations, but also raised its dividend by 25%

Shares of Fresh Del Monte Produce Inc. fell Monday, after the fresh fruit and vegetable producer missed fourth-quarter earnings expectations, as lower banana sales were offset by strength in pineapples and higher prices for avocados.

The company also announced the booking of a $131.2 million impairment charge, following a review of its North America operations, including Mann Packing, and boosted its quarterly dividend by 25%.

The stock (FDP) slumped 1.3% in premarket trading.

The company swung to a net loss of $106.4 million, or $2.22 a share, from net income of $18.3 million, or 38 cents a share, in the same period a year ago. Excluding nonrecurring items, such as the impairment charge, adjusted earnings per share of 25 cents missed the average estimate of two analysts compiled by FactSet of 31 cents.

Sales fell 3% to $1.01 billion, below the FactSet average estimate of $1.03 billion.

Banana sales dropped 6% to $379.6 million, due to lower sales volumes and per-unit selling prices in North America.

Meanwhile, fresh and value-added product sales edged up 1% to $582.8 million, as strength in pineapples and higher prices for avocados and non-tropical fruit offset lower prices for vegetables and prepared foods.

Separately, the company raised its quarterly dividend by to 25 cents a share from 20 cents a share. Based on Friday's stock closing price of $23.92, the new annual dividend rate implies a dividend yield of 4.18%, which is nearly triple the implied yield for the S&P 500 index SPX of 1.41%.

The stock has lost 8.9% year to date while the S&P 500 has gained 6.7%.

-Tomi Kilgore

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02-26-24 0736ET

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