Shares in US produce group Calavo Growers closed down 12% after the company reported higher third-quarter profits that missed Wall Street expectations.

Calavo booked earnings per share of US$0.38 for the three months to the end of July. A year earlier it posted EPS of $0.18 but, according to BB&T Capital Markets, the consensus forecast on Wall Street was for EPS of $0.52.

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Net income more than doubled to $5.7m. Operating income was $8.5m, against $4.5m a year earlier. Revenues fell 7% to $153.2m.

Chairman, president and CEO Lee Cole said Calavo had “turned in a strong showing during the third quarter”. The company cited “sharply higher” year-over-year fresh avocado volume, “strong gross margins” in the Calavo Foods business segment and “solid incremental contribution” from Renaissance Food Group, which it acquired last year.

However, Cole admitted: “Several factors, however, tempered our operating performance in the most recent quarter, constraining what we anticipated would be an even stronger third period. The last phase of our recently completed expansion of packing operations in Uruapan, Michoacán, Mexico resulted in that facility being offline for the final two weeks of the third quarter. Additionally, the introduction of Peruvian avocados into the marketplace resulted in temporary pricing volatility as the industry adjusted to this new fruit source. Consequently, this pushed back the harvest of California avocados, which historically peaks during the third period.”

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BB&T Capital Markets analyst Heather Jones said she “still liked the Calavo story and the secular growth of the category”.

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However, she added: “The valuation will likely be somewhat depressed until the company is able to demonstrate some predictability in its earnings progression. Even after the downdraft in the shares today, we see only modest potential upside availability against revised numbers.”