US: Fresh Del Monte shares slide on Q4 miss
Del Monte shares hit by profit miss
Fresh Del Monte Produce posted a bigger-than-expected loss in the fourth quarter, prompting shares to slide in New York yesterday (18 February).
The company racked up a loss of $146m or $0.36 a share in the three months to the end of December, missing consensus expectations of a loss of $0.16 a share. In the fourth quarter of last year, Fresh Del Monte booked a loss of $1.2m.
The group's stock price fell more than 5% as a result to close at $25.39 yesterday.
According to Janney Montgomery Scott analyst Jonathan Feeney, the profit miss reflected "higher than expected SG&A", which "outweighed better than expected gross profit". Gross profit in the quarter dipped to $32.9m, down from $38.5m last year.
The fourth-quarter loss weighed on the group's full year result and Del Monte's 2013 full-year net loss totalled $36.8m compared to an income of $145m in the comparable period of last year.
Fresh Del Monte was, however, able to report an improved top-line performance. Fourth-quarter sales rise to to $879.9m from $776.9m and full-year sales increased to $3.68bn from $3.42bn.
Fresh Del Monte Produce Inc. (NYSE: FDP) today reported financial results for the fourth quarter and year ended December 27, 2013. For the full year 2013, the Company reported net loss per share of $0.66, compared with earnings per diluted share of $2.46 in 2012. Comparable earnings per share for the full year 2013 were $1.52, compared with comparable earnings per diluted share of $2.54 for the full year 2012. The Company reported a net loss per share of $2.62 in the fourth quarter of 2013, compared with earnings per diluted share at breakeven, or $0.00, in the fourth quarter of 2012. Comparable net loss per share was $0.35 in the fourth quarter of 2013, compared with comparable earnings per diluted share at breakeven, or $0.00, in the fourth quarter of 2012.
Included in the adjustments to arrive at comparable loss per share are $99.6 million of charges related to the write-off of goodwill and other intangible assets associated with the Company's 2004 acquisition of Prepared Foods in Europe, Africa, the Middle East and the countries formerly part of the Soviet Union. The performance of the Prepared Food business has not met the Company's expectations in Europe and there has been a recent cyclical downturn in industrial products. The Company is focusing on improving the European business and concentrating on higher growth markets in the Middle East and Africa.
“2013 was a year of contrast for us, with increased sales and strong progress toward our long-term initiatives tarnished by a disappointing conclusion to the year,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer. “During the fourth quarter of 2013 we faced higher input costs and lingering issues in our European market. We have addressed these conditions by implementing a host of strategic measures to reduce the negative impact on our business. We exited underperforming operations, adjusted our business model in Europe and broadened our asset base. Looking forward, based on our expansion into new markets, new distribution channels and new product introductions, I am confident the foundation we have built will enable us to improve our performance and enhance delivery of long-term value for our shareholders."
Net sales for the year 2013 increased $262.5 million to $3.7 billion, compared with $3.4 billion in 2012. Net sales for the fourth quarter of 2013 were $879.9 million, compared with $776.9 million in the prior year's fourth quarter. The increase in net sales for the year 2013 and fourth quarter of 2013 was due to strong net sales performance in all of the Company's business segments, with solid volume gains over the previous year.
Gross profit for the year 2013 was $290.4 million, compared with gross profit of $341.7 million in 2012. Comparable gross profit was $291.9 million in 2013, compared with comparable gross profit of $342.6 million in 2012. Gross profit for the fourth quarter of 2013 was $32.9 million, compared with $38.5 million in the fourth quarter of 2012. Comparable gross profit for the fourth quarter of 2013 was $34.3 million, compared with comparable gross profit of $38.6 million in the fourth quarter of 2012. The decrease in comparable gross profit for the full year and fourth quarter was primarily attributable to an increase in ocean freight and fruit procurement and production costs.
Operating loss for the year 2013 was $30.7 million, compared with operating income of $161.4 million in 2012. Comparable operating income was $107.5 million in 2013, compared with $165.6 million in 2012. Operating loss for the fourth quarter of 2013 was $142.8 million, compared with an operating loss of $2.1 million in the prior year's fourth quarter. Comparable operating loss for the fourth quarter was 2013 of $16.8 million, compared with comparable operating loss of $1.9 million in the fourth quarter of 2012. The increase in comparable operating loss for the full year and fourth quarter was principally due to lower gross profit, increased selling, general and administrative expenses and increased losses on disposal of property, plant and equipment.
Net loss for the year 2013 was $37.3 million, compared with net income of $143.2 million in 2012. Comparable net income was $85.9 million in 2013, compared with comparable net income of $147.4 million in 2012. Net loss for the fourth quarter of 2013 was $146.8 million, compared with net income at breakeven, or $0.0 million the fourth quarter of 2012. Comparable net loss was $19.2 million in the fourth quarter of 2013, compared with comparable net income of $0.2 million in the fourth quarter of 2012. The change in comparable net income (loss) for the full year and fourth quarter was primarily the result of lower operating income.
Original source: Fresh Del Monte Produce
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