Dole Food Profit Grows 20% in 2nd Quarter

Dole Food Co., the world’s biggest producer of fresh fruit, on Monday said fiscal second-quarter earnings rose 20% on cost-cutting in its banana business and as citrus trees in California recovered from a freeze.

Net income was $45.1 million, or 81 cents a share, in the quarter ended June 17, up from $37.5 million, or 66 cents, a year earlier.

Sales fell 1.2% to $1.3 billion, from $1.32 billion. Gross margins rose 18% to $211.6 million, though, because Dole’s cost of products sold fell 4.2% to $1.09 billion.

Profit beat the 77-cent forecast of six analysts polled by IBES International Inc. Dole attributed some of the earnings increase to sales of its packaged fruit bowls and fresh-cut salads, as well as improved vegetable production.

“Going into this year, I would have expected a range of 80 to 90 cents, and had hoped for it to be at the upper end of that,” said Steve Laveson, an analyst at Becker Capital Management Inc., which held about 1.07 million Dole shares as of March.

Dole, based in Westlake Village, reported no gains or charges. A year earlier, the company had a gain of $14.8 million from Hurricane Mitch-related insurance proceeds, resulting in net income of $47.4 million, or 83 cents.

Laveson said the results were lower than he originally expected because of a number of factors, including banana prices, the decline of the euro against the U.S. dollar and the under-performance of the company’s fresh-cut flower business.

Dole’s shares rose 13 cents to close at $15.69 on the New York Stock Exchange.

U.S. fruit companies’ shares have plunged in the last year, in part because of a banana trade war in Europe. Dole fell 48%, Chiquita Brands International Inc. dropped 55%, and Fresh Del Monte Produce Inc. slid 55%.

Separately Monday, canned fruit and vegetable processor Tri Valley Growers said it has filed for Chapter 11 bankruptcy protection and hired a firm to look for investors as it struggles with product oversupply and other issues.

San Ramon-based Tri Valley, which produces or sells more than half of the U.S.’ canned peaches and about a third of its canned tomatoes, said a group of bankers has agreed to loan it $270 million to fund operations through its bankruptcy.

The company said its financial performance has been hurt over the last two years by unfavorable long-term contracts, an oversupply of tomatoes and processing plants that were running under capacity.