Chiquita Brands swings to profit in 1st quarter

Cost controls help Chiquita Brands post profit in 1st quarter despite drop in revenue

Associated Press

CHARLOTTE, N.C. (AP) -- Chiquita Brands International Inc. moved to a profit for its first quarter as lower expenses helped offset the fruit and vegetable company's still somewhat soft sales.

The company, based in Charlotte, N.C., earned $2 million, or 5 cents per share, for the quarter. That's compared with a loss of $11 million, or 24 cents per share, in the same quarter last year.

Chiquita's total revenue slipped 2.4 percent to $774 million from $794 million. Its banana segment revenue slipped 3 percent, and its salad and healthy snacks revenue increased nearly 1 percent. Its revenue from other produce sales, which is the smallest part of its business, fell 26 percent.

Chiquita faced some pressure from unfavorable exchange rates during the quarter. Company President and CEO Ed Lonergan said the company is focused on improving productivity and controlling its spending. Those moves, along with recent updates to its management team, cause him to believe that Chiquita has the pieces in place to reach its long-term goals.

Chiquita said that its performance in its core businesses continues to improve, helped by some new contracts and improved sales with existing customers. It also shed some less profitable contracts in Europe.

Chiquita expects it may benefit from new banana contracts, private-label sales and consolidation of some of its facilities in the Midwest to cut costs. However, it faces potentially uncertain banana supplies out of Latin America and its sourcing costs could increase. It also could continue to face some pressure from the negative impact of euro exchange rates.

The company's shares fell 15 cents to $8.65 in afternoon trading.

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