Produce giant Chiquita Brands International has cut its 2010 profit forecast after running up a third-quarter loss amid “challenging” conditions in Europe.
Chiquita now sees full-year comparable income reaching US$50-60m against its previous target of $80-90m.
The company booked an underlying third-quarter loss of $7m compared income of $9m last year as net sales fell 8% to $730m. Chiquita cited lower banana and salad volumes.
“While our third-quarter results are mostly in line with our expectations, we are disappointed by recent trends in local European pricing,” chairman and CEO Fernando Aguirre said. “Although we continue to make progress in executing our business improvement plans in Europe and realised better local pricing year-on-year, market pricing began to soften late in the quarter due to excessive imports from EU and ACP sources. In the salads business, volumes were lower than we expected, reflecting retailers’ conversion to private label and generally soft category demand.”
He added: “This has been one of the most challenging operating environments in Europe. Notwithstanding the recent strengthening of the Euro, if market conditions do not improve in the near term, our full-year comparable income is expected to be lower than previously estimated.”
Chiquita also predicted that annual revenues would fall 5% in 2010, a deterioration of its previous forecast when the company said sales would fall “slightly”.
Click here for the full earnings statement from Chiquita.