U.S. Markets closed

Dole shares tumble on surprise 3rd-quarter loss

NEW YORK (AP) -- Dole Food Co. shares fell Friday after the company posted a surprise third-quarter loss.

THE SPARK: Excluding one-time items, Dole late Wednesday posted an adjusted loss from continuing operations of $5.3 million, or 6 cents per share. Revenue fell 6 percent to $1.96 billion.

Analysts polled by FactSet expected an adjusted profit of 14 cents per share on $2.07 billion in revenue.

THE BIG PICTURE: Dole said it faced several challenges during the recent quarter, including an ongoing quarantine issue involving China and the Philippines, as well as tough growing conditions and the effects of unfavorable currency exchange rates.

Dole attributed the drop in revenue to the sale of two of its fresh fruit subsidiaries. Excluding year-ago revenue of $186 million from those businesses, along with $13 million the recent quarter's sales stemming from the acquisition of a berry business, revenue rose 2 percent.

THE ANALYSIS: Janney Capital Markets analyst Jonathan Feeney backed his "Buy" rating for Dole, noting that the sale of the two businesses and the Chinese quarantine on bananas from the Philippines drove its fresh fruit sales down 10 percent.

While sales at the company's fresh vegetable business were flat, and slightly lower than he expected, Feeney said that packaged food sales rose 3 percent and were roughly in line with what he was looking for.

The analyst added that banana supplies from Latin America are expected to remain tight into next year, which could lead to better pricing in North America, where Dole is one of the top banana sellers.

SHARE ACTION: Down 54 cents, or 4.7 percent, to $11.07 in midday trading, after dropping as low as $10.66 earlier in the day. Over the past 52 weeks, Dole shares have traded between $8.02 and $15.19.

The stock ended Thursday up 36 percent for the year, before the results were released.