(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 said.
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 Exchange. (Reporting by Amitha Rajan in Bangalore; Editing by Pratish Narayanan)
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