Los Angeles - Banana marketer Chiquita Brands International Inc. Thursday posted a 77 percent drop in first-quarter profit as storm damage in banana-growing regions limited supply and the company faced higher fuel costs and import tariffs in Europe.
Net income was $20 million, or 46 cents a share, in the quarter ended March 31, compared with $87 million, or $1.94 per share a share, a year earlier.
Net sales rose 24 percent to $1.2 billion, driven mostly by the company's acquisition of the Fresh Express fresh-cut salad business.
Chiquita said banana earnings were hit by a $16 million in increase in sourcing costs due to fruit shortages caused by Hurricane Stan and Tropical Storm Gamma in the fourth quarter of last year. It also recorded an extra $18 million in fuel, ship charter and fruit purchase costs.
The company said it expects fuel-related costs to rise by about $55 million for the year, a $7 million increase from its previous forecast.
The European Union on Jan. 1 increased tariffs on Latin American bananas as part of a plan to shelter growers in former European colonies in Africa and the Caribbean. That move boosted Chiquita's import tariff costs by $16 million, the company said.
Earlier this week, competitor Fresh Del Monte Produce Inc. posted an unexpected 72-percent drop in first-quarter profit, in part due to higher costs to procure bananas.
Chiquita shares were down 10 cents at $14.61 in late trade on Inet, after closing at $14.71, down 71 cents, or 4.6 percent, in regular trading on the New York Stock Exchange.