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CINCINNATI — Chiquita Brands International Inc. said Thursday that its sales of bananas and packaged salads were stronger than expected in the first quarter, but the strong dollar dragged its net income down 26 percent.
The earnings results handily beat analyst expectations, and Chiquita shares soared in after-hours trading.
The Cincinnati-based company said it earned $23 million, or 51 cents a share, in the period that ended in March, down from $31 million, or 70 cents a share, a year earlier.
Revenue fell 10 percent to $842 million.
Thomson Reuters said analysts, who typically exclude one-time items, on average predicted earnings per share of 28 cents on revenue of $910.5 million.
Shares closed up 4 cents at $7.57 in regular trading Thursday. In after-hours trading, they rose another 68 cents, or 9 percent, to $8.25.
Chief Executive Fernando Aguirre said the company's first quarter was strong considering the drag that foreign currency had on results. But showings in salads were better than expected, giving the company a jump on its plan to improve its results this year.
"We now have a head start on the year, and we are confident in the execution of our profit-improvement and cost reduction initiatives," he said in a statement.
Net banana sales fell 8 percent to $485 million, due to lower exchange rates and lower pricing overseas. Lower prices overseas were offset by higher ones in North America, and better results in Asia and the Middle East, the company said.
As the U.S. dollar gains strength, that weighs on companies that do their business overseas.
In Chiquita's salad and health snacks segment, net sales fell 16 percent to $281 million as the company discontinued certain unprofitable foodservice and retail contracts there. The company also discontinued certain unprofitable products, like many of its Verdelli-branded fresh produce products.
Chiquita said it expects its foodservice volume to drop by as much as 50 percent this year compared to 2008, though the lost volume should be replaced by more profitable retail volume in the second quarter.
Chiquita left its 2009 outlook unchanged, despite having results that were better than it expected, particularly in its salads and snacks segment. The company said it continues to expect improved results in 2009 due to profit-improvement strategies and efforts to reduce costs.
