Chiquita Brands International went into damage-control mode after its shares dropped by almost a quarter following the gloomy third quarter outlook it issued yesterday (16 June).
The fruit and prepared salad group predicted a “significant loss” for the third quarter due to escalating commodity costs, supply constraints and flat volumes for bananas.
Chiquita, which also sells fresh-packed salads, raised its estimate for product supply costs for fiscal 2008 by between US$60m and $65m – bringing its full-year total to $240-265m.
However, after shares plunged 24% from $21.93 to close at $16.65 on the New York Stock Exchange, the company emphasised that it expects to deliver “strong year-on-year improvement in operating performance” for the full year.
While Chiquita declined to comment on its share price drop it did note that the third quarter is traditionally a weak trading period.
“We do not expect that the loss anticipated in the third quarter to be substantially worse than the loss reported in the third quarter of last year,” a spokesperson for the company told just-food.
“Consistent with our earlier disclosures, we continue to expect to deliver much better performance for 2008 versus year ago,” chairman and CEO Fernando Aguirre emphasised.
Chiquita shares gained 5.41% in morning trade, rising to $17.55 at time of press.