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Banana-hit Dole takes job cuts above 4,000


images (6) Dole Foods revealed a further round of cost cuts, which will take above 4,000 job losses since summer 2010, as it revealed worse-than-expected, blamed on soft banana and iceberg lettuce prices.

Shares in the fruit-and-vegetables group tumbled 10% to a one-year low in early deals.

The fruit and vegetables giant said that about 550 further jobs would go, mainly in Europe and Latin America, but also Japan, from a second-round of restructuring, following the 3,700 axed under a shake-up started last year.

Within Europe, which took the brunt of the last shake-up, the group was shedding "some folk we had in eastern Europe", besides cutting more from back office operations, David DeLorenzo, the Dole Foods chief executive, told investors.

The company, which sold 400 acres of Hawaiian farmland over the summer for $10.4m, and last month sold a Spanish ripening business to Compagnie Frutiere for E15m ($21m), also revealed it was to "idle" 500 acres of land in Costa Rica.

Banana slip-up

Dole unveiled the moves, which will save some $24m, with results showing it had fallen $47m into the red in the July-to-September quarter, equivalent to $0.17 a share, despite a 4.9% rise to $2.09bn in revenues.

The loss, while an improvement on the $49m a year before, was wider than the $0.10-a-share figure expected by Wall Street.

Mr DeLorenzo blamed the result primarily on a "challenging market in Europe", which had seen a glut of banana imports, after an unusually strong pick-up in Latin American production from a weather-affected first-half.

"While you will always have some seasonality, this year was more skewed than ever," Mr DeLorenzo said, noting a 9% jump in Latin American exports to Europe during the quarter.

Group operating profits in fresh fruit slumped 80% to $7m.

Iceberg chill

He also highlighted weakness in the iceberg lettuce markets, which cut to $3m, from $5m profits in Dole’s fresh vegetables division.

US iceberg lettuce prices had fallen 20%, after an "increasing in plantings, coupled with good growing conditions" boosted supplies.

Dole Foods shares plunged to $9.17 in opening deals in New York before recovering some ground to closed at $9.33, down 8.9%.

http://www.agrimoney.com/news/banana-hit-dole-takes-job-cuts-above-4000–3866.html

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