Shares in Chiquita Brands International slumped more than 24% yesterday (16 June) after the fruit group predicted a “significant loss” for the third quarter.
Chiquita said supply constraints for bananas and escalating commodity costs would dent results. While the company said it had raised the price of bananas, volumes “remain flat to down”. This means that the group has been unable to offset increased costs.
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.
“We expect these factors to result in a difficult third quarter . . . and a more normal fourth quarter,” Chiquita Chairman and Chief Executive Fernando Aguirre said.
Shares in the company sank from an open to $21.93 to close yesterday at $16.65.