(Recasts; adds analyst's comments, details, share movement)
June 16 Chiquita Brands International CQB.N
forecast a "significant" third-quarter loss and reported a fall
in European banana volumes during April and May as higher
prices failed to offset a spike in costs, slamming the banana
distributor's shares down as much as 27 percent.
Analysts on average expected the company to break even in
the third quarter, according to Reuters Estimates.
Supply constraints induced by bad weather in parts of Latin
America have driven global demand for bananas, pushing prices
up. But banana companies like Chiquita and rival Fresh Del
Monte Produce Inc (FDP.N) are feeling the pinch as costs for
raw materials, fuel, fertilizers, packaging and shipping
threaten to reach record highs.
On Monday, Chiquita also said it expects 2008 costs to be
higher by $60 million to $65 million than its prior forecast.
"Pricing in Europe has begun to moderate and reflect normal
seasonal trends, as previously expected, and industry and other
product supply costs continue to increase substantially," Chief
Executive Fernando Aguirre said in a statement.
Chiquita reported an 8 percent rise in European pricing --
on a local currency basis -- and an 11 percent drop in volumes
in the European market.
"Local pricing in Europe disappointed as it increased just
8 percent for April through May as compared to our 11 percent
projection," analyst Heather Jones of BB&T Capital Markets
Jones, who downgraded the stock to "hold" from "buy," said
she had expected volumes in Europe to decline by 5 percent.
Volumes in the North American market remained relatively
flat, while banana pricing was up 36 percent.
Shares of Chiquita fell to a low of $17.14, before
recouping some losses to trade down $5.70 at $17.61. Fresh Del
Monte's stock plunged as much as 20 percent to $25.32.
Chiquita's and Fresh Del Monte's shares were the top two
percentage losers Monday morning on the New York Stock
(Reporting by Amitha Rajan in Bangalore; Editing by Pratish